China to overtake India in gold consumption thanks to 6.6 million bridal gifts
China is set to overtake India in gold consumption as a result of Chinese wedding gifts of gold and Indian import restrictions.
Roughly two thirds of the 10 million Chinese brides in 2013 are expected to receive golden presents. This is big business for gold dealers despite the collapsing prices.
Chinese grooms are said to "have to hand over several kilos of gold to get the bride to say yes," according to one Indian bullion trader.
The China Gold Association recently stated that in 2013 total Chinese demand could reach between 900 to 1,000 tonnes, which would surpass demand from India.
In India, the trend is towards less consumption as the government continues to tighten its grip on the country's gold trade, announcing last week a hike in the import tariff value of gold to $459 per 10 grams.
In May the tariff value of gold was pegged at $440 per 10 grams.
Gold is India's number two import item in terms of value after crude oil and the government has been trying to curb imports to reduce the country's chronic balance of payments problem.
The government has hiked the import tax from 2% to 6% over the past year, banned traders from importing gold on margin and may announce further regulations this month, including barring state-run entities from importing gold.