China world's biggest gold market

China has become the world's biggest gold market, with consumer demand rising by 32 percent in 2013 to a record level of 1,066 metric tons, according to the latest report by the World Gold Council.

“There has been a shift in gold demand from the West to East, due to the increasing appetite among the middle class in China and India,” said Albert Cheng, the council's managing director.

In 2013, investment in gold bars and coins rose by 38 percent and 16 percent in China and India respectively.

Demand for jewelry increased by 29 percent in China and by 11 percent in India, according to the council, the gold industry's market development organization.

A survey in January by the council showed that about 40 percent of consumers in China and India are willing to buy gold jewelry in the coming year.

Cheng said the price of gold will keep rising in 2014. The average price was $1,411 per ounce in 2013, down by 15 percent on 2012.

Cheng said there were many reasons for the fluctuation in the gold price in 2013, such as demand for jewelry, purchases by central banks and a change in investment demand.

Wong Wai Sheung, chairman and chief executive of Lukfook Group, a leading jewelry dealer in Hong Kong, said the Chinese mainland remains a promising market in the long run.

He said the US is experiencing a slow recovery and China is conducting economic reform, which will pose certain threats to the jewelry industry. But he believes the gold price will increase, although there will be some short-term volatility.

Gold traded on Tuesday at $1,313 per ounce, up by about 10 percent from the start of the year.