Gold consumers in China and India will probably buy more jewelry, bars and coins this year as stock volatility and growth concerns boost the appeal of bullion as a store of value, according to the World Gold Council.
“Global stock markets are in a bit of turmoil, so that makes gold a very good wealth-preservation tool,” P.R. Somasundaram, managing director for India, said by phone from Mumbai on Wednesday before the council issued its quarterly report on global trends. “We’re seeing that happening as people in China and India are buying bars and coins.”
For demand, “all the factors are far more positive than 2015,” Somasundaram said. Consumption in India last year was influenced by “unseasonal rains and a weak monsoon,” while investment demand continues to grow in China, he said.
Demand for bars and coins in China, the largest single market, jumped 25 percent in the fourth quarter from a year earlier, and was up 21 percent for the year with currency weakness a key driver, the council said in its report. Banks and retailers are confident physical demand will remain healthy, it said.
Total consumer demand was 984.5 metric tons in China last year and 848.9 tons in India, according to council data. Net bullion imports by India fell 16 percent to 233.9 tons in the fourth quarter from a year earlier and were 897.5 tons for the whole of 2015, the data show.
Reference: Bloomberg
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