US be beating China in gold buying? In terms of expenditure growth per unit of GDP, that's how. In truth, of course, we can prove anything with statistical series. China's nominal expenditure on jewellery, bars and coins, i.e. its spending on gold as a physical investment, far outstrips that of the United States in tonnes, monetary terms and when set against units of GDP.
In outright terms in the fourth quarter of 2012, for example, U.S. demand for gold in jewellery, coins and bars reached 56.6 tonnes, compared with China's 202.5 tonnes, and India's 262 tonnes (figures from Thomson Reuters GFMS).
This is understandable, given that jewellery demand in the United States (and in Europe) is for adornment rather than as an investment. In most of the world outside North America and Europe, gold jewellery is high-carat, low mark-up and often fabricated on site and carries much more of an investment element to it (also of course, meaning that it is more readily mobilised for scrap).
In absolute tonnage terms, U.S. gold demand forged an upward path from the start of this exercise (the first quarter of 2005) through to the third quarter of 2011), but the variations have had a lower seasonality to them than they do in East and South Asia. The quarterly variations in 2012 were minimal.
When this is expressed in terms of notional expenditure on gold content and expressed per million units of GDP, then gold content in the United States worked out at $227. In China the equivalent was $4,219, while in India the figure was much higher at $55,400. It must be noted that this refers only to the approximate value of the gold content - U.S. spending on each jewellery piece will have been substantially higher than these numbers.
But relative to GDP growth in the second half of 2012, U.S. expenditure outstrips the rate in China and India.
The primary reason for this apparently impressive performance is less encouraging, however. It reflects the fact that the Indian and Chinese economies overall are continuing to show much higher growth rates than the United States, while in India especially, gold now has growing competition from white goods and other outlets for the leisure dollar. The U.S. market is more mature, although here too it is having to put up a fight against silver and branded jewellery of other, non-precious, materials.
China still on a medium-term upward trajectory
Meanwhile with the organic