WGC: China could surpass India as leading Gold-Buying country

A new survey has indicated that China could overtake India as the world's largest Gold-Buying nation in the remainder of 2009.

Citing statistics from leading precious metals consultancy GFMS, the World Gold Council (WGC) noted in the report that Indian demand slumped by 83 percent year-on-year to 17.7 tonnes in the first quarter of the year.

Furthermore, the study found that gold demand in China was six times higher than in India during the three-month period, which could see the latter toppled as the biggest global gold consumer.

Commenting on the results, Hou Huimin, deputy head of the China Gold Association, told Bloomberg: "India's gold consumption is reportedly dropping this year due to the financial crisis.

"China's consumption is growing and this year's will surely be more than last year's."

The news comes after US Federal Reserve chairman Ben Bernanke alerted anyone considering making a Gold Investment last week with his views on inflation.

Gold is traditionally viewed as an ideal hedge in an inflationary environment and Mr. Bernanke told the Wall Street Journal that the US will need to "tighten monetary policy" to avoid this scenario.

As Hwang Il Doo, a Seoul-based commodities broker with KEB Futures, explained in a Bloomberg interview: "An improving economic outlook is leading investors to the risk of inflation, which will become more pronounced over time, bolstering demand for gold."

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