DJ UPDATE: GFMS: Chinese Gold Demand Soars; India Still Largest Consumer
Jan 17, 2012 (Dow Jones Commodities News via Comtex) ----Chinese gold bar demand jumps 45% to 258 tons in 2011, says GFMS
--Indian gold bar demand rises 6% to a record 282 tons
--Chinese jewelry fabrication meanwhile up 16%; eclipses 500-ton mark
--Indian jewelry fabrication slips 3% to 699 tons
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By Rhiannon Hoyle
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--China's appetite for gold continued to grow at a rapid pace in 2011, with investment in gold bullion rising 45% to 258 metric tons, and jewelry fabrication rising 16% to eclipse the 500-ton mark for the first time, metals consultancy GFMS said Tuesday.
Demand for gold, the ownership of which was banned in China until 2003, has exploded in the East Asian nation amid rising income levels, rapid urbanization, and fears of runaway inflation, GFMS--a unit of Thomson Reuters Corp. (TRI)--said in an update to its 2011 Gold Survey report.
"Chinese consumers continued to look to gold as a means of diversifying assets, protection against rising inflation and a weakening domestic currency," it said.
Still, despite China's rapid growth, neighboring India remains the market's largest consumer of such products. Bar demand in India rose to a new record of 282 tons, surpassing the previous year's record by 6%, GFMS said. This was largely down to expectations of further increases in the metal's price following declines in other markets, like stocks and property.
And even after an estimated 3% fall in jewelry fabrication, demand from the sector still totaled 699 tons for the year, GFMS said.
"Indian jewelry fabrication is expected to remain fairly robust," the consultancy said.
China was, ultimately, "the standout performer" in the jewelry sector last year, though, GFMS said.
"The growth in Chinese jewelry fabrication in the last few years has been extraordinary. Since 2005, Chinese offtake has risen by more than 110%, while the global total has slipped by more than a quarter over the same period," it added.
Total world jewelry fabrication demand was 1,979 tons in 2011--meaning that, together, India and China accounted for more than 60% of the global market.
-By Rhiannon Hoyle, Dow Jones Newswires; 44 (0)20 7842 9405; email@example.com
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