By: Sharda Prashad

There have been rumblings that China may top India as the world’s largest gold consumer.  The buzz started at the end of Q1/09, when China’s consumption of gold jewelry and its gold retail investment beat India’s as Indian investors were actually dishoarding.

Q2/09 results won’t be out for another two weeks, but Neil Meader, research director at gold consultancy GFMS, says it wouldn’t be surprising to see India back to its usual spot – at the top.  For the past few years India jewelry consumption has been moving sideways thanks to high gold prices, says Meader.  Meanwhile, China’s consumption been steadily growing.  As for India’s dishoarding, Meader said that was very unusual behaviour and would probably not be repeated in future quarters.

While China’s definitely been narrowing the gap with India as the world’s largest gold consumer, Neader said it would very premature to say that India is any immediate danger of losing its golden status.