CHINESE HOUSEHOLDS Buying Gold are set to continue beating former world #1 India after a solid first quarter that saw gold demand reach record levels in Asia's biggest economy.
"It does seem that China is picking up the slack in the system from a weaker India," says Ross Norman, chief executive of UK bullion retailer Sharps Pixley.
"China overtook India as the world's top consumer of gold in the first quarter," affirms market-developement organization the World Gold Council, emphasizing expectations that China will be the dominant force Buying Gold in 2012.
China's gold imports from Hong Kong were 65% higher in April than March, the third consecutive monthly rise according to data reported by analysts at Germany's second-largest bank, Commerzbank.
"Further growth is expected," adds the World Gold Council, saying that China's middle-class is set to keep Buying Gold, and highlighting its position as the biggest consumer of the metal in 2012.
"Investors remain wary of inflation rates; and property market restrictions continue to drive demand for gold among investors seeking access to real assets."
In contrast, Indian household demand has suffered from the government's 2012 challenge against Gold Buying, plus persistent weakness in the Rupee as the economy slows.
India's Finance Minister Pranab Mukherjee announced on Monday that there is a need to spread financial literacy in his country, encouraging wealthier people to invest in what he called "wealth generating" assets as opposed to Buying Gold.
Seeing 2012 as a repeat of 2009 – when the global economic crisis saw a drop in demand and a rise in gold selling by Indian households – "Indian gold consumption fell 19%" that year, reports the Financial Times.
But Indian consumers will continue paying more money for less gold, Morgan Stanley predicts. The investment bank's analysts forecasts Gold Buying demand will fall 4% by weight in 2012, while rising by 4% in value.
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