China, India buyers boost gold
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A bigger appetite from India and China for gold is expected to boost demand for the yellow metal globally this year from 2009, the World Gold Council said.
Consumers in the world's two largest gold markets continue to push up demand due to rising income, high savings rate and strong economic growth, the WGC said.
China's retail gold demand rose 16 percent to 153.7 tons on China's mainland, Hong Kong and Taiwan in the third quarter of this year. China, whose economy grew 9.6 percent in the third quarter, accounts for one-fifth of global demand.
"Healthy gold demand growth in the third quarter occurred in the context of record prices, demonstrating how consumers, particularly in India and China, are continuing to appreciate the enduring value of gold," said Marcus Grubb, investment managing director at the WGC.
Global gold demand rose to 773 tons in the third quarter, up an annual 13 percent.
China is already the world's second biggest gold consumer, with jewelry contributing the lion's share but investment demand is also rising. Jewelry demand rose 9 percent in the quarter to 107.9 tons while retail investment jumped 39 percent to 45.8 tons.
Gold is viewed as a safe haven amid high inflation. So when inflation in China rose to 4.4 percent in October, gold finds a safe haven in the pockets of investors despite its soaring prices.
Gold prices hit a record US$1,403 an ounce in November. The surge reflected a weakening US dollar.
The Federal Reserve's disclosure that it would pump US$600 billion to bolster a faltering American economy is seen as a development that is "positive" for gold, Grubb said.
