China, India projected to account for half of world gold demand

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The globe’s two top consumers of gold are poised to account for as much as half of world demand by the end of this year, according to an advocacy for the precious metal.

MineWeb reports the World Gold Council indicated India and China will account for as much as 45 to 50 percent within the next four-plus months. Those figures are projected to be spurred by demand of consumers.

CNBC reports demand for the yellowish metal pushed up 53 percent during the second quarter of this year. The surge was propelled by investors capitalizing on reduced prices of gold as the increase coincided with when it endured its record-high quarterly losses.

Gold prices have suffered as of late because of reduced inflation levels, the likelihood of the Fed tapering stimulus measures and surges in yields on U.S. Treasury yields, according to CNBC.

Worldwide central banks have reduced the pace of their purchasing of the precious metal during the second quarter of this year. During the April-to-June period, the nations’ banks acquired 71.1 metric tons, which represents a reduction from the 109.7 metric tons from the previous quarter. During the second quarter of last year, central banks bought 164.5 metric tons.

Managing director for investments Marcus Grubb with the World Gold Council told Mineweb during an interview that both nations will amount to approximately the same demand, which ranges from 900 to 1,000 tons. Those figures are based on figures thus far this year, he said.

The Indian and Chinese markets “are remarkably close together,” the managing director for investments said during the interview. “They are still within about 35 tons of each other, which is very similar to where they were in the first half of last year (roughly 30 tons apart) in spite of being 50 percent larger this year.”

China is driving toward demanding a record high of the precious metal, pushing well past the standing record of 776 tons, he said, basing the assertion on the forecast issued by the World Gold Council.

Both nations’ demand is based on a fervent increase in the metal’s use in jewelry, bars and coins.

He said the fulcrum of gold demand appears to be shifting and it will be sustained for some time.

“The take away for me is that this gold is heading mainly eastward and it is heading into strong hands,” he said during the interview.


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