Indian, Chinese consumer joins Gold rush

(April 15, 2013)

In India, retailers are witnessing a surge in demand and expect up to 50 per cent spike in sales volume in this marriage season.

NEW DELHI (BullionStreet): Consumers in India and China, two of the world’s largest gold markets, have reportedly swamped gold jewelry shops lured by the two-year low price of gold bullion after prices plummeted.

Other major gold markets such as the UAE and US also witnesses surge in gold buying as Indian expatriates in particular raided gold shops across the Emirates, buying trinkets and jewellery in all shapes and sizes as well as gold bars and coins.

In India, retailers are witnessing a surge in demand and expect up to 50 per cent spike in sales volume in this marriage season.

They said the plunge in prices added to the momentum which had been up since the festival of and the upcoming wedding season.

Analysts said the rush will eventually help gold as India and China, the two Asian and global tiger economies, make up more than half of total annual gold demand.

They added that chances are that these bargain-basement gold prices are only going to spur their appetite even further, not dampen it.

Between the two, they consumed 1.64 million kg of gold in 2012 alone. Gold demand in India for 2012 stood at a massive 864.2 tonnes while the Chinese gobbled up 776.1 tonnes of the precious metal last year.

In China, largest gold producer,China National Gold Group slashed the bullion price from 313 yuan ($50.55) per gram to 298.50 yuan per gram at its largest store in Shanghai, the lowest level in two years.

Many showrooms ran out of 10-gram and 20-gram bars as the number of customers doubled and gold bars were selling like hot cakes at its shops.

Meanwhile, a WGC official said despite the current turbulence, the long-term fundamentals of the gold market remain intact as gold is a time-tested asset class which has helped preserve the wealth of global families for generations.