How can the US be beating China in gold buying?
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 growth in the jewellery and bar/coin markets, China has increased its absolute demand for gold rapidly over this period; tonnage demand in the final quarter of 2012 was triple that of the first quarter of 2005, while approximate yuan expenditure rose by a factor of nine. With the government continuing to open up the gold market (including the possibility of a gold exchange-traded fund in China later this year), we should be able to expect local Chinese expenditure on gold to continue to increase.
Indian demand arguably withstood tariff rises in 2012
India's gold demand growth was slower than that of China
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