For years, India has been the world’s top gold buyer, as its huge population seems to have a love affair with jewelry made out of the precious metal. But with gold on a tear over the past four years, reaching a peak of $1,575 an ounce earlier this month, the Chinese have gone on a buying spree of their own. And now they have surpassed their Asian neighbor as the largest gold purchaser.
China's demand is particularly strong among investors, whose acquisitions of the precious metal doubled to 90.9 metric tons in the first quarter, the World Gold Council stated in its quarterly report, according to The Wall Street Journal.
|China is now top gold buyer.
(Getty Images photo)
Meanwhile, India posted a small rise in investor buying to 85.6 tons. That means 25 percent of global investment demand for gold comes from China, compared to 23 percent for India.
In 2007, 61 percent of physical gold demand came from India, compared to 9 percent from China, the Journal reports. To be sure, India still has the lead when it comes to jewelry, registering 291.8 tons of consumer purchases in the first quarter, well above China's 233.8 tons.
But experts expect China’s demand to keep rising. “Gold has taken on a new role in China amid concern about inflation,” Song Qing of Lion Fund Management tells Bloomberg.
“It is increasingly seen as an asset allocation choice. Just imagine the total wealth in China and even a small percentage of that choosing to buy gold.”
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