London: Demand for gold jewellery in China continued to grow in 2011, expanding almost 15 percent to a new record high, a trend that looks likely to be repeated this year, metals consultancy GFMS Ltd. said Wednesday.
The growth in China's gold jewelry sector last year came in contrast to a contraction in jewelry fabrication in other regions, including India, and was driven primarily by rising domestic inflation concerns and continued growth in disposable incomes in the country, London-based GFMS said in its Gold Survey 2012.
Chinese jewelry fabrication gained 14.6 percent to reach a new record high of 496 metric tons in 2011, building on a near-20 percent gain to 423 tons in 2010. Indian jewelry fabrication, on the other hand, fell 3.1 percent to 701 tonnes, although this compared with a record high of 723 tonnes in 2010. Overall, global jewellery fabrication fell 2.2 percent in 2011 to 1,973 tonnes.
"The rate of expansion in gold demand across the Asian giant has been extraordinary, with annual growth over the last decade averaging 10 percent year-on-year," said GFMS. Furthermore, this increase is "all the more remarkable when it comes in an environment of rising and often volatile prices," it added.
Spot gold hit a record-high at USD 1,920.94 a troy ounce in September 2011.
Chinese demand for gold jewellery should continue to grow this year, said GFMS.
"Retail sales ahead and post the Chinese New Year period have again been substantial, mirroring demand the previous year," said the report. "Continued economic growth and a desire to own gold as an alternative asset are likely to propel Chinese jewellery fabrication to another record this year," it added.