Festival season to boost jewellery demand

China's gold demand is expected to grow 1 percent this year to a record of around 860 tonnes, the global head of metals at consultancy Thomson Reuters GFMS said on Thursday, with both jewellery and investment sales rising.


That increase means China will overtake India as the world's biggest consumer of gold for the first time on a yearly basis, Philip Klapwijk told the online Reuters Global Gold Forum.

"China will overtake India ... both in overall demand terms and as the world's largest jewellery market," he said.

He said China's jewellery demand is expected to climb to around 520 tonnes from 515 tonnes in 2011, while investment is seen at around 270 tonnes, up from 265 tonnes last year. The balance, of around 70 tonnes, is industrial consumption, Klapwijk said.

China is already the main consumer of a range of commodities, including copper, coal and iron ore.

It is also the biggest gold producer, with mine output of 371 tonnes in 2011, but it is still having to import large quantities of gold to satisfy domestic demand.

Klapwijk said gross imports of gold were likely to top 800 tonnes this year, with the majority channelled through Hong Kong. However, a "substantial part" of those will be 'round-tripped', a practice by which gold is transported to a certain location, then quickly re-exported.

"Over 40 percent of flows from Hong Kong in 2012 we estimate is for 'round tripping'," he said.

He said local trade sources suggested gold recycling -- a major source of supply to the gold market -- was likely to remain flat year-on-year.

"This is in spite of higher local prices," he said. "It's not that different to the picture elsewhere. (It) seems we need to ratchet up to another big figure - $2,000? - before a really big shift up in scrap supply occurs."

Spot gold prices are up nearly 10 percent this year to around $1,720 an ounce, but remain well off the record high at $1,920.30 an ounce they hit in September last year.

With the wedding and festival season on, the second half of the current calendar year is expected to put drooping jewellery sales back on track and take the annual gold demand to the usual 800-and-odd tonnes this year too, said Vipin Sharma,wholesale fashion jewelry and cheap wholesale jewelry online supplier. Director (Jewellery),We judge ourselves not according to the smile on our ownfigurine. World Gold Council.

In the first half of the year, there was 8 per cent drop (in value terms) in jewellery demand from that of the comparable period last year.

However, in the first half of the current year, due to price volatility of the metal, jewellery demand dropped significantly.

To shore up the falling demand, World Gold Council, for the first time in the world, has taken an initiative to launch its own jewellery brand in the market, and promote it.

The not-for-profit, market development organisation for the gold industry, today launched its jewellery brand Azva. The agency,The Iron Ring is made from either wrought iron or stainless steel ring.This tungsten bracelet for men is constructed in maintenance-free tungsten. in a tie-up with various manufacturers across the country and their design teams, has designed a range of wedding jewellery.