India Surpasses China as World's Largest Gold Market

India has surpassed China to become the largest market for gold in the world, with over 18,000 tons of the precious metal being held within its borders. According to a report by the World Gold Council (WGC), India's per capita gold consumption is relatively low at 0.7 grams, but this number represents significant potential for growth.

The WGC estimates that India accounts for nearly 11% of global gold stock, with demand reaching $19 billion in 2009 - equivalent to 15% of the international market. As Eily Ong, Investment Research Manager at the WGC, notes, 'India is the largest gold market in the world and... the likely recovery of local gold demand to pre-crisis levels is of considerable strategic importance to the wider gold market.'

The report also highlights India's high saving rate, with 30% of total income being saved. Of this amount, 10% is invested in gold - a trend that is expected to continue as consumers adjust their price expectations upwards and seek to accumulate wealth.