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Homemetal commoditiesChina becomes top gold consumer in 2013

China becomes top gold consumer in 2013

China has overtaken India as the world's largest gold consumer thanks to soaring purchases of jewelry, minted Panda coins and small gold bars.

According to the Thomson Reuters GFMS gold survey, the most widely followed report on the industry, Chinese demand reached 1,189.8 tons last year, a 32 percent year-on-year jump and a fivefold increase since 2003.

(Read more: Chinese gold imports may fall as buying frenzy calms)

Stringer | AFP | Getty Images

Its hungry factories and mushrooming cities had already made China the number one global consumer of industrial metals such as copper, aluminium and zinc.

The frenetic buying of gold in China, which led to a temporary shortage of physical stocks, was sparked by the 28 percent fall in the precious metal's price last year, the worst performance in more than three decades.

(Read more: China gold consumption set to cool in 2014)

Following a 12-year bull run, gold lost its lustre in Europe and North America as economic conditions improved and the prospects of inflation receded. Western investors dumped gold-backed exchange traded funds in 2013, with holdings falling by 880 tons.

A simultaneous "Asian-led buying frenzy", with consumers chasing bargains, resulted in gold bars being removed from vaults in Europe and other markets, melted into smaller bars in Swiss refineries, and shipped to the East. GFMS described the flow as the "largest movement of gold, by value, in history".


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