Gold jewelry demand in Indonesia is set to expand to a four-year high as consumers in Southeast Asia’s biggest buyer join India to China in increasing purchases as prices slump and the middle class expands.
Gold demand in China, the second- largest user after India last year, may expand 13 percent to 870 metric tons in 2012, the World Gold Council said, dropping a forecast for consumption to reach as much as 1,000 tons.
Gold demand in China may surge as much as 30 percent this year as rising incomes boost consumption, helping the country topple India as the world’s largest bullion market on an annual basis, according to the World Gold Council.
The premium paid by gold buyers in Vietnam, the largest user in Southeast Asia after Thailand, will extend declines from a record after banks complete the return of bullion deposits to investors this month.
China’s gold imports jumped almost fivefold in the first 10 months from the entire amount shipped in last year as concern about rising inflation increased its appeal as a store of value, said the Shanghai Gold Exchange.
Gold imports by China may increase after investment demand more than doubled in the first quarter, with the country overtaking India to become the largest market for gold coins and bars, the World Gold Council said.
Huaan Asset Management Co. aims to attract as much as $400 million in initial funding for one of China’s first two gold exchange-traded funds as a drop in prices attracts buyers in the second-biggest consumer of bullion.
China’s investment gold demand may reach 150 metric tons this year, up from 105 tons last year, Albert Cheng, managing director of the World Gold Council’s Far East department, told a conference in Shanghai today. That’s an even larger increase when compared with the 3-4 tons 10 years ago, Cheng said.