Last year, China topped India as the world’s largest gold consumer for the first time as investments in coins and bars and more so jewellery sales soared.
According to the closely watched Thomson Reuters GFMS gold survey released last week Chinese demand reached 1,189.8 tonnes last year, a 32% jump compared to 2012 and a stunning fivefold increase over the past decade.
Despite onerous new taxes and import restrictions Indian consumption still rose 5% to 987.2 tonnes last year and the two countries together represent more than 50% of world demand.
GFMS data also showed Chinese jewellery fabrication surged by 31% in 2013 to 724 tonnes, 33% of the world total, while Indian manufacturing declined slightly to 613 tonnes.
Talk of India lifting the import and consumption curbs recently lifted the gold price, but as China enters its auspicious year of the horse, it may widen the jewellery gap again.
The South China Morning Post reports some jewellery store chains across Hong Kong and the mainland saw a 15% – 20% increase in sales volume for January compared with last year which was celebrated as the year of the snake:
"Horses are regarded as the symbol of energy and health to the Chinese," said Lau Hak-bun, chief operations director at Chow Sang Sang. "People like to wear accessories or have golden ornaments of horses rather than snakes, which are lazy and evil in their view."
Wong Wai-sheung, chairman of Luk Fook, said he also expected single-digit growth rates for gold sales in the month. Tak Sang Jewellery and Goldsmith said its gold sales rose 5 per cent in the period.
"The peak period of the sale of golden horse goods started last week. Many buyers want to have the accessories before the Lunar New Year," Lau said.
Another factor spurring gold sales in China last year was a 28% fall in the price of the metal during the year. Gold was last trading at $1,263 an ounce in New York, up nearly 5% since the start of the year, but off recent highs.
Image of horse grazing in Tagong Sichuan province 2010 Shanidov