China's demand for commodities is well known, as the country devours everything from copper to nickel to oil to develop its economy. Now, you can include gold in that list.
Gold enthusiasts have long seen China as a growth opportunity for their beloved metal, with the theory that rising affluence amid distrust of banks and concerns about inflation would encourage consumers to buy gold as a hedge. And the usual metrics used for anything involving China were, of course, attractive: If a billion people bought just a sliver of gold each, the demand on the world's limited gold supplies would send prices sharply higher.
According to the World Gold Council, China is now delivering on this promise, overtaking Indian buyers as the world's biggest consumers of gold in the first quarter of 2011. From Dow Jones: "China's investment demand for gold more than doubled to 90.9 metric tons in the first three months of the year, outpacing India's modest rise to 85.6 tons, the World Gold Council said in its quarterly report on Thursday. China now accounts for 25 per cent of gold investment demand, compared with India's 23 per cent."
The shift in numbers is dramatic. As the Dow Jones article points out, as recently as 2007 India's gold demand accounted for 61 per cent of the world's total. China's demand was just 9 per cent.
The development comes at an interesting time for gold. Earlier this week, George Soros reported in a regulatory filing that he had sold most of his gold holdings in the SPDR Gold Trust exchange traded fund in the first quarter, a time that roughly coincides with gold's remarkable rise above $1,500 (U.S.) an ounce. On Friday in late-morning trading at $1,494 an ounce, up about $2.