As gold demand in India plunges, WGC says world hit
China, the second biggest gold buyer behind India, saw a 1 percent drop in jewellery demand to 510.6 tonnes, its first annual decline since 2002.
Overall demand was flat in China in the full year and fell 12 percent in India, although it rose by 35 percent in the final quarter as buyers scrambled to avoid a widely-anticipated hike in import duty announced in January.
"Provided we see no more increases in import duty, we still think we will see India continue to recover from what was a difficult year in 2012 overall," Grubb said. "Some of the buying may have been pulled into Q4 (by anticipation of the duty hike), but overall we think that will be countered by other factors."
He said a higher number of auspicious gold-buying occasions in the first quarter of 2013 would likely favour the metal.
"When you look at the full year, we're anticipating that we'll see 865-965 tonnes of demand," he said.
JURY OUT ON CHINA
In China, demand is expected to recover to between 780-880 tonnes this year, against 776.1 tonnes last year.
"The jury's out on a major re-acceleration of growth in Chinese gold demand," Grubb said. "Last year we saw the first significant slowdown in the Chinese economy in years. That did affect these numbers."
"What you're seeing in January and February is a re-acceleration in
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