(Image source from: China dethrones India in gold consumption})

China has overtaken India in gold consumption for the first time. Now China has become the world's largest gold comsumer. In 2013, China bought 1,066 tonnes of gold, while India purchased 975 tonnes of the precious metal.

As per the World Gold Council data released on Tuesday, China’s demand for the yellow metal increased by 32% in 2013, while India's demand for gold rose by only 13% due to import curbs. Besides the Chinese demand is expected to remain high in 2014 as well.

The first half of 2013 saw a strong demand for gold in India, but the second half saw a fall due to government imposed restrictions on gold imports and increased import duty to bring the current account deficit under control.

The restrictions imposed by the government gave rise to smuggling of gold in 2013. According to the WGC almost 150-200 tonnes of gold is smuggled into India due to the import curbs on the yellow metal.

WGC, PR managing director, India, Somasundaram, has stated that China's gold policy is clear. Chinese policies like gold savings scheme through banks and the exchange-traded funds work towards the gold policy followed by Beijing.

China's demand for gold is likely to be 1,000-1,100 tonnes this year, and India's demand is projected to be around 900-1,000 tonnes, according to WGC estimates.

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(AW: Pratima Tigga)