Goldfinger moves to China

Goldfinger moves to China

Have you noticed empty jewellery shops recently? Have you been to a wedding where less gold is on display? And have you looked at small 1g earrings lying at the back of the safe with more respect of late?

Think hard, because the inexorable rise in gold prices seems to have finally dented the famed Indian appetite for the yellow metal. China is set to overtake India as the most prodigious buyer of gold in 2009, says GFMS, a metals consultancy.

Indians have been put off by gold prices, now over Rs18,000 per 10g in the domestic market, compared with a little over Rs10,000 per 10g two years ago. Meanwhile, the Sensex trades below its December 2007 level.

Gold imports this year are expected to be around 400 tonnes, half of what they were five years ago.

GFMS estimates that gold demand in India is likely to be 422 tonnes while the Chinese demand will be 432 tonnes. This data does not include central bank purchases of gold; the Reserve Bank of India had bought 200 tonnes of gold in November.