Mumbai: India is likely to overtake China in terms of demand for gold this year to become the precious metal's top consumer on the back of a higher economic growth trajectory, a global industry body said on Thursday.
"We expect both India and China's gold demand to be in the range of 900-1,000 tonne (in 2015), with India slightly higher than China. This is mainly due to the higher economic growth momentum projected in India and China's lack of momentum," World Gold Council (WGC) Managing Director, India, Somasundaram PR told PTI here.
The first quarter in India is usually muted in terms of gold demand, which picks up momentum from the April-June period onwards.
However, in China the first quarter is the most hectic one for gold buyers as it coincides with their new year and festivals, he added.
In the first quarter of 2015, India's gold demand went up by 15 percent to 191.7 tonne compared to 167.1 tonne during the corresponding quarter last year, as per the data given in WGC 'Gold Demand Trends First quarter 2015' report.
In value terms, gold demand grew by 9 percent to Rs 46,730.6 crore in first quarter of 2015 compared to Rs 42,898.6 crore in year ago period.
In China, the gold demand in the first quarter declined by 7 percent to 272.9 tonne from 293.8 tonne in the same period of last year, mainly due to slower GDP growth which dampened consumer sentiment. In value terms, the demand dipped by 12 percent to USD 10,689.9 million in January-March compared to USD 12,214.5 million in the same period of 2014.
A rally in domestic equity markets ate into gold demand in China, both for investment and jewellery.
Jewellery demand in China fell by 10 percent - a sizable year-on-year drop in volume given the size of the market - as slowing economic growth impacted consumer sentiment, the report said.
Jewellery demand in the Communist giant in the January -March period stood at 213.2 tonne against 236 tonne in the same period last year.
"Although not overtly an investment, there is a strong investment motive to jewellery demand, which was undermined as Chinese consumers turned their attention to the stock markets," it pointed out.
In comparison, there was 22 per cent rise in Indian jewellery demand at 150.8 tonne compared to 123.5 tonne in same period last year, which was more a reflection of unusual weakness in the year-earlier period than any particular strength in the first quarter of 2015.
