China just overtook India as the world's No.1 gold market...
EVEN AS the world's biggest consumer of gold – India – is shying away from Buying Gold jewelry, China has emerged as world No.1 in the yellow metal market, reports Commodity Online in Mumbai.
According to a recent report, demand for gold jewellery in China grew in the second quarter, driven mainly by the country's better-than-expected economic growth.
China's Gold Mining output overtook South Africa to become the world No.1 in 2008. Now in 2009, gold demand across China, Taiwan and Hong Kong rose 4% annually to 78.7 tonnes between April and July. And there was even stronger year-on-year growth in demand on the Chinese mainland alone, up 6%, which boosted its appetite for gold jewellery to 72.5 tonnes in the period.
Indeed, China's mainland proved to be the most resilient among global jewellery markets, said the World Gold Council, analyzing data from the GFMS consultancy in London.
The Chinese mainland stands out in comparison to the 26% decline recorded across the rest of the world. The relative stability of the Yuan, plus China's continuing economic growth, have been instrumental in propping up jewelry demand, says the WGC.
A surge in bank lending has also helped cushion the impact from the global credit crunch, while an aggressive stimulus package has underpinned the domestic economy.
China's economy grew 7.1% in the first half of the year, with better-than-expected growth of 7.9% annualized in the second quarter.
Amongst Chinese gold consumers – the hungriest worldwide between April and July – the 24-carat gold market is the most resilient, while demand for 18-carat jewelry has eased.
The lackluster 18-carat market may be due to a shift in consumer preferences toward platinum, which has benefited from a price fall of about 40% at the retail level from a year ago.
Chinese citizens also grew there Gold Investment at a strong pace, too. Mirroring strong demand from investors across the Western world, investment demand for gold rose 47% on the Chinese mainland, up to 17.1 tonnes in the second quarter.