China will be world's #1 gold consumer in 2009

According to Reuters, China will become the world’s number 1 gold consumer in 2009, which has been previously held in the past few years by India. This year China is forecasted to acquire 432 tonnes (metric ton, 2200 lbs.) compared to India’s 422 tonnes. This excludes purchases by foreign central banks.

India bought 713 tonnes in 2008 and due to the higher gold prices in 2009 purchasing has slumped.

"There is a huge latent demand in India and it will explode if prices fall significantly from current levels. India will react far more strongly than China to a lower price environment," Klapwijk said. As Chinese citizens have become wealthier they have the ability to buy more gold.

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