Strong yellow metal demand has secured India the top position globally as gold consumer, followed by China, the World Gold Council said here Thursday.
While, India's gold demand was 842.7 tonnes in 2014, China's was 814 tonnes.
"India - one of the two largest gold markets in the world - had its strongest year for jewellery demand since the World Gold Council's records began in 1995, up 8 percent on a year ago to 662 tonnes," the report 'Gold Demand Trends - 2014' stated.
"This was driven by wedding and festival buying despite the presence of government restrictions on gold imports for most of the year. Although China saw a demand decline of 33 percent year on year, it still represents the second best year for jewellery demand in China since our records began," it added.
"It was a standout year for Indian jewellery, despite government restrictions on gold imports, reinforcing the nation's affinity for gold. Meanwhile, Chinese gold demand returned to those last seen in 2011/2012 as consumers and investors took time to digest the substantial volumes accumulated in 2013," Marcus Grubb, managing director of Investment Strategy said.
Combined demand volumes in India and China have grown by 71 percent over the last 10 years. The two markets accounted for 54 percent of consumer gold demand in 2014 up from 33 percent in 2005.
The annual gold demand globally was 3,924 tonnes, 4 percent lower than 2013. Total jewellery demand globally for the year was 2,153 tonnes, down 10 percent compared with the previous year. A development which is not surprising given the price-driven jewellery demand surge in 2013, the report stated.
"2014 was a year of stabilisation and innovation in the gold market, with annual gold demand down by just 4 percent after the record-breaking level of buying seen in 2013. What's particularly notable about 2014 is that the striking shift in physical gold demand from West to East is now being followed by gold infrastructure development in Asia," Grubb added.
Regarding investment demand of the yellow metal, the report said it was up 2 percent in 2014, from 885 tonnes in 2013 to 905 tonnes in 2014.
"Total bar and coin investment was down 40 percent as investors, who had made major purchases in 2013 held back from further purchases. This was offset by a dramatic slowdown in outflows from exchange traded funds, from 880 tonnes in 2013 to 159 tonnes in 2014," the report said.
The central banks continued to view the value of gold as a reserve asset in 2014, WGC said.
"Annual central bank demand was up 17 percent to 477 tonnes. This was particularly evident in the last quarter of 2014, when demand was up 40 percent year-on-year to 119 tonnes, making Q4 (October-December) 2014 the 16th consecutive quarter and 2014, the fifth consecutive year that central banks were net purchasers of gold," it added.
