Demand for gold in India is booming as China is looking at other options. These two countries are the top two retail markets for gold in Asia.
The discrepancy between the two biggest consumers worldwide seems uncommon. As a rule, gold investors in China and India grab the metal when prices decline and hope these will climb up just like in 2011 when gold went close to $2,000 per ounce.
Shares are more of a stalemate for Chinese buyers this year as gold prices hovered around $1,200 per ounce. The Shanghai market moved up 41 percent while traders from the mainland helped drive shares in Hong Kong shares to almost 16 percent.
A precious metals specialist with the Australia and New Zealand Banking Group said many investors are choosing the stock markets and this is affecting demand for gold jewelry.
Analysts also projected that gold imports may decrease by a high of 20 percent in 2015.
The poor prediction does not augur well since China accounts for practically one-third of gold consumption all over the world. Outlook towards this commodity has become more negative as interest rates are expected to increase and push up value of the USD.
In fact, the Indian government loosened several import restrictions which instigate hopes that purchases in India will offset sagging demand in China.
Chinese gold imports declined seven percent to 272.9 metric tons from January to March of 2015. This was led by the 10 percent fall in jewelry consumption, according to the World Gold Council. Quite the reverse, Indian demand increased 15 percent to 191.7 tons while jewelry sales edged higher 22 percent.
The same analyst from ANZ Bank said Chinese imports plunged 13.4 percent.
Meanwhile, spot gold is almost flat until June and traded around $1,178 per ounce in New York.
Observers say Chinese buyers kept away from the yellow metal due to a government crackdown which drove people away from obvious consumption.
During the past years, the commodity attracted interest during economic uncertainty because of its store of value.