LONDON - China lost its place to India as the world's biggest gold consumer in 2014, sector data showed Thursday, hit by collapsing jewellery demand after one year in the top spot.
While world jewellery demand sank in 2014, India experienced an exceptional year.
Indian gold demand sank 14 percent to 842.7 tonnes last year from 2013, but Chinese demand slumped 38 percent to 814 tonnes, the World Gold Council (WGC) said in a report.
Overall gold demand meanwhile dropped four percent last year to 3,924 tonnes compared with a record amount in 2013, pushed lower as Chinese jewellery demand tumbled by a third.
That marked the lowest overall level in five years and was also the third successive annual decline for the precious metal, whose two main drivers are jewellery and investment buying.
World jewellery demand sank 10 percent to 2,153 tonnes last year, while China registered a 33-percent slump to 814 tonnes, according to the council representing leading gold producers.
However, India experienced an exceptional year for jewellery.
"India ... had its strongest year for jewellery demand since the WGC's records began in 1995, up 8.0 percent on a year ago to 662 tonnes," the organisation added.
"This was driven by wedding and festival buying despite the presence of government restrictions on gold imports for most of the year."
India had imposed gold import curbs in 2013 in order to avert a trade deficit crisis that pushed the rupee to record lows. However, it eased those restrictions last November.
“2014 was a year of stabilisation and innovation in the gold market, with annual gold demand down by just 4.0 percent after the record-breaking level of buying seen in 2013," added Marcus Grubb, the group's managing director of investment strategy.
"It was a standout year for Indian jewellery, despite government restrictions on gold imports, reinforcing the nation’s affinity with 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."
The London-based WGC added that the year ended strongly in the fourth quarter, boosted by jewellery demand and central bank buying.
Central banks bought 477 tonnes of gold last year, up 17 percent from 409 tonnes in 2013, according to the WGC. That marked the fifth consecutive year where central banks were net purchasers of gold.