In the second update to its Gold Survey 2011, GFMS said China and Turkey are set to be the main drivers of jewelry demand in 2012.
LONDON(BullionStreet),20Jan,2012:China may surpass India in terms of gold demand to become the world's largest gold buyer in the first half of this year since the country's gold demand defied the global trend last year and increased sharply, according to the research institute GFMS, which specializes in the precious metals market.China's gold demand grew 16%, reaching 850 tons in 2011, despite global demand for gold dipping 1.9% to 1,979 tons, the Chinese-language Beijing News reported.According to GFMS's Gold Survey 2011, Chinese consumers view gold as a financial tool to help them diversify their assets, offset inflation and fluctuations in exchange rates. The research institute said Turkey will also be a main gold consumer in the future.
India may lose No 1 gold consumer spot in H1-2012 : GFMS
Leading precious metals consultancy, GFMS said China may overtake India as world's largest gold consumer within the first six months of this year. In the second update to its Gold Survey 2011, GFMS said China and Turkey are set to be the main drivers of jewelry demand in 2012. The yellow metal is likely to end its decade long dream run after hitting the $2,000 mark in late this year or early 2013, the report said. Gold has been a top-performing asset since 2001 as portfolio diversification, concerns over sovereign risk and rock-bottom interest rates helped lift prices from a low near $250 an ounce in 2001 to a peak above $1,920 in September 2011. It is likely to surpass that level in the final quarter of 2012 or the first three months of next year, GFMS said, potentially breaking through the $2,000 an ounce level.
On the supply side, mine output is expected to rise 3.2 percent in the first half of the year, although most new supply will come from existing, rather than new, projects. For the first half of 2012, the company forecasts gold prices will average $1,640 an ounce, close to current levels. In the second half, it sees prices at an average of $1,840 an ounce. GFMS expects jewelry demand to soften by 3.1 percent in the first six months of 2012, in line with a 2.2 percent decline in overall demand. Most of this decline will likely be due to softer demand from India, still the world's biggest bullion buyer. The gold market is moving into a less auspicious year, GFMS said, and rupee weakness has tended to negate dollar gold's declines.