Bullion-hungry Asian consumers are
often touted as the fundamental support for
goldprices
. But India's demand for gold has weakened as the combination of high inflation and a weakening rupee sap the country's collective buying power. China seems to be stepping in to fill the gap.
China's gold appetite rose 20% in 2011. But even though the country imported $46 billion in gold — roughly 770 metric tons of bullion — it still trailed India, which absorbed 933 metric tons or $56 billion in precious metal.
Overall, worldwide gold demand rose 0.4% to 40,671 metric tons worth $205.5 billion.
The World Gold Council said it's "likely that China will emerge" as the world's largest consumer on 2012.
The world's second-largest economy has a population blessed with a rising income, providing a direct link to the demand for gold jewelry and other luxury goods.