China Q1 gold demand hits record, bucks global fall- WGC
China's gold demand hit a record high in the first quarter on investor worries over inflation and property market curbs, the World Gold Council said on Thursday, bucking a lower trend in global consumption driven by higher gold prices.
Global gold demand fell 5 percent on the year to 1,097.6 tonnes in the first three months of 2012, as jewellery and technology sectors bought less gold with average prices up 22 percent from a year earlier, but investment demand and central bank buying helped cushion the fall, the industry group said.
China remained the world's top gold consumer for the second quarter in a row, with its gold consumer demand up 10 percent to 255.2 tonnes, beating India's 207.6 tonnes, which was a 29 percent decline on the year.
"Further growth is expected (in China): investors remain wary of high inflation rates; and property market restrictions continue to drive demand for gold among investors seeking access to real assets," said the WGC in its quarterly Gold Demand Trends report.
China's physical gold bars and coins demand rose 13 percent on the year to a quarterly record of 98.6 tonnes, while jewellery demand climbed 8 percent to 156.6 tonnes and accounted for 30 percent of the world's gold jewellery market, the WGC data showed.
The WGC said investment demand in China going forward will depend on price expectations, and the performance of other assets such as property and the domestic stock market, but inflation will continue to be a concern to investors.
The country's gold jewellery demand is likely to remain on a more moderate growth path as the market matures and economic growth cools, it said. Spot gold averaged $1,690 an ounce in the first quarter, up from $1,387 a year earlier. Prices have declined to below $1,550 this week.