Chart of the week: China, India & gold

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/beyond-brics/2012/05/21/chart-of-the-week-china-india-gold/#ixzz1vlQzAFeL

There comes a time in the life cycle of most commodities when China takes over in terms of demand. For gold, long the preserve of India, that moment is nearly upon us.
Data from the World Gold Council and compiled by beyondbrics show that Chinese demand for gold, both in terms of jewellery and investment, has overtaken India on a quarterly basis. On a rolling four-quarters, China is just – just – behind India. The chart below shows the rolling total, and the pattern is clear.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/beyond-brics/2012/05/21/chart-of-the-week-china-india-gold/#ixzz1vlR2m7pW

In 2011 China’s gold purchases totalled 769.8 tonnes, compared to India’s 933.4 tonnes. But the reduction in demand from India may see a drop under 900 tonnes for 2012, and China surge to over 900 tonnes.
Overall, gold demand is down – around 5 per cent from 1,150.7 tonnes in Q1 2011 to 1,097.6 tonnes in the same 2012 period. China and India together make 42 per cent of the world total.
The World Gold Council had this on India:

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/beyond-brics/2012/05/21/chart-of-the-week-china-india-gold/#ixzz1vlR5vbLP

Gold demand in India was affected in Q1 2012 by a number of factors; a new tax on gold jewellery, two increases in the import duty for gold and weakness and volatility in the rupee. Jewellery demand fell 19% to 152.0t from Q1 2011. Investment demand was down 46% from the previous year at 55.6t. In May, the government withdrew the new tax on jewellery and the market is already responding positively.

But China is set to take the lead:

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/beyond-brics/2012/05/21/chart-of-the-week-china-india-gold/#ixzz1vlRPHjZk

China and India have seen continuing economic growth and whilst China’s economy is expected to slow, it will nonetheless surpass the rates of growth in the West. As we previously forecast it is likely China will become the largest source of demand for gold in 2012.

http://blogs.ft.com/beyond-brics/2012/05/21/chart-of-the-week-china-india-gold/#axzz1vlQUiUUQ