NEW DELHI: Both India and China are likely to consume around 900-1,000 mt of gold in 2015, which would be an increase from 2014 for India and roughly flat for China, the World Gold Council said Thursday, May 14.
India consumed 842.7 mt of gold in 2014, compared with 813.6 mt in China.
This was a shift from 974.8 mt for India and 1,311.8 mt for China in 2013.
Overall, total global gold demand for Q1 2015 was 1,079 mt, down just 1% year on year.
During an interview to promote the WGC’s Q1 2015 Gold Demand Trends report, Alistair Hewitt, head of market intelligence at WGC, said India and China accounted for around 54% of total gold demand in Q1.
The report said that global demand for jewelry — still the most significant component of overall demand — totaled 601 mt in Q1 2015, 3% lower than the 620 mt recorded in the same quarter last year.
“There were pockets of strength across a number of Southeast Asian countries — including Malaysia, Indonesia, South Korea, Thailand and Vietnam. In addition, jewelry demand in India was up 22% to 151 mt, whilst the US saw further steady growth, up 4%. This was counterbalanced by declines in Turkey, Russia and the Middle East and in China, jewelry demand dropped 10% to 213 mt,” the report said.
The main factor for the slowdown in China was attributed to racing stock markets, offering investors better returns.
Hewitt noted that on the investment side, Q1 saw the best start to a year since 2012.
“There’s a sense that investors’ attitudes have improved,” he said. “They are less bearish. Investors are more inclined to ask what’s the next trigger for a move higher.”
Investment demand increased 4% to 279 mt in Q1 2015, up from 268 mt in Q1 2014.
There were net inflows of 26 mt into gold-backed Exchange Traded Funds, the first time since Q4 2012.
“Investment in bars and coins came under pressure in the face of buoyant stock markets, notably in India and China, and currency fluctuations in Turkey and Japan, but this was offset by strong retail investor demand in the eurozone, up 16% to 61 mt, most notably in Germany and Switzerland,” the report said.
INDIA POLICY ADJUSTMENTS ‘ENCOURAGING’
Looking at India, Hewitt said the WGC is “encouraged” by the new Indian government’s approach to gold market policy.
