world Gold Council reported to have a rise in Gold demand in India and China.
Both countries shown some good growth past year despite of recession.

Analysis


It is estimated that gold consumption in China and India will increase in coming time.

The World Gold Council (WGC) estimated that if China's gold jewelry consumption totaled the same per-capita rate as India, Hong Kong or Saudi Arabia, its annual demand would increase 100-fold. The council's related report on China, "Gold in the Year of the Tiger," contained a more modest prediction, however, estimating that gold demand would merely double within the next decade. In 2009, China's gold consumption came to $14 billion or 11 percent of the global gold demand.
the managing director of investment for the WGC, said, "The excitement generated by the Chinese economic growth story is not new. However, clarifying the impact of China's gross domestic product growth trajectory on the outlook for the Chinese gold market has been elusive — until today.

"Now one of the world's largest economies, China has already rapidly become a prominent gold market," Grubb continued. "However, our analysis confirms that significant untapped growth potential exists in the Chinese gold market. In China, if gold demand continues to accelerate and becomes more comparable with other major markets, the World Gold Council expects it to double in tonnage terms within the next decade, which would represent annual gold demand of approximately $29 billion at year-end-2009 average prices."
Over the past five years, gold demand in China has increased at an average annual rate of 13 percent. The WGC determined that  its consumption intensity substantially lags behind that of other major markets, while the country's total gold investment demand has grown in line with its gross domestic product (GDP) and population. China is the world's sixth-largest official holder of gold, but its gold reserves currently account for less than 2 percent of its reserves and therefore, remain low by international standards. Even adding 10 percent from its current level would translate to an additional 100 tons of gold offtake.
In the past decade, gold mining producers have increased their gold production by 84 percent; however, the nation's known reserves account for only 4 percent of global reserves. Assuming these figures are accurate, the WGC estimates that China could exhaust its known gold mining reserves in six years.
Eily Ong, an investment research manager at the WGC, added, "Our analysis confirms the potential for an increasing imbalance in supply and demand in China. Gold demand has already outpaced Chinese production growth since 1992, even before the deregulation of private ownership a decade later. However, our analysis shows that if gold demand were to continue to increase so markedly, domestic supply would be unable to keep pace. Whatever the outcome, China's outlook will almost certainly have implications for the global gold market."
India is also showing great response according to RNCOS, the global research pioneer, has extensively studied Indian gems and jewellery industry in order to examine the post-recession industry scenario as well as its future growth potentials. The research report titled "Indian Gems and Jewellery Market - Future Prospects to 2011" is a live testimony of conceptual analysis of all prominent market segments and their unbiased evaluation in Indian context. The findings of the report indicate towards fast growing and potentially lucrative market, which has shown notable resilience against economic slowdown and emerged out with marginal dents.
We have thoroughly researched the Indian gems and jewellery industry and identified decisive market trends shaping the industry's current and future growth prospects. As discussed in report, India's share in world gold consumption stands at around 20% at present. Based on some concrete market fundamentals studied in the report, we anticipate this share to grow dynamically in coming years and the country will capture nearly one-fourth of global gold consumption by 2012.
Further, 85-90% of gold and gold jewellery demand in the country is domestically-driven and remaining 10-15% is export-led. Gold jewellery constitutes the bulk of the Indian gems and jewellery market. Despite recession, exports of gold jewellery increased rapidly in 2008-09 over 2007-08, which is an indication of growing acceptance of Indian gold jewellery in the international market. We expect this trend to remain applicable in coming years also, which will enable the industry to achieve its exponential growth trajectory.
However, some restraints still exist that may hamper the smooth growth of the industry. Highly unorganized market structure, cheap and attractive Chinese products, etc. can potentially disrupt the growth rhythm of the Indian gems and jewellery market. So, a feasible and proactive contingency strategy is required to overcome such challenges.
"Indian Gems and Jewellery Market - Future Prospects to 2011" is an outcome of extensive research and thorough analysis of the Indian gems and jewellery industry. It provides coherent study of gold, diamond, gemstones, and jewellery segments and provides all-round market intelligence on production, consumption, exports, imports, etc. The report also includes competitive landscape so as to help clients in outlining their market strategies accordingly.