London, UK (BBN)-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, reports Bloomberg.
“Global stock markets are in a bit of turmoil, so that makes gold a very good wealth-preservation tool,” PR 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.”
The two countries represented more than half of global consumer demand last year, according to the council, an industry body that promotes the use of bullion.
Gold has posted its best start to the year since 1980 as investors seek a haven amid slumping share markets and slowing growth in China, the world’s second-largest economy.
Global stocks have lost 10 per cent in 2016.
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 per cent in the fourth quarter from a year earlier, and was up 21 per cent 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.