India Leading Gold Consumer, MidEast Grows

India’s wedding traditions, which include giving valuable gifts to the groom's family, coupled by a population of over one billion will ensure the sub-continent's continuing position as the world’s biggest gold consumer.

While China is slowly becoming one of the biggest consumers of gold and growing in appetite, according to a recent report by the World Gold Council (WGC), India is predicted to remain the biggest consumer of gold this year, with an expected consumption of 700 tons. This is an increase of 11 percent on the country’s 2004 gold consumption.

Gold is a common gift at Indian weddings, especially by the newlywed’s family. In the past it was customary for the bride’s family to give the groom’s family a dowry in India, consisting of gold jewelry, a symbol of wealth and in rural areas as financial collateral.

But while giving a dowry is illegal in India these days, the gift giving tradition, especially in rural areas, has in many ways replaced this custom.

The WGC estimates the total gold held by individuals in India at13,000 tons.

Meanwhile, gold consumption in the Middle East rose 13 percent in value during the first quarter of the year, with Saudi Arabia and the UAE being the biggest consumers in the region, both increasing consumption by 15 percent.

Quarterly consumption in the Mideast totaled $1.636 billion in value, and increased 8 percent in weight to 104.1 tons during the period, the WGC said.

The third biggest consumer in the region turned out to be Egypt, consuming 21.3 tons of gold worth $335 million, increasing 6 percent and 11 percent, respectively.