MUMBAI (Scrap Register): Gold consumption per capita for key markets China and India are still relatively small, but are expected to rise, said analysts at Citi in a research note on their takeaways from last week’s London Bullion Market Association conference.

“While this is predominately a function of their vast populations, there is potential for demand growth to continue expanding at pace,” Citi noted.

“As such, the geography of global gold demand has shifted from West to East and LBMA panel participants agreed that Asian countries will remain firmly in the driving seat in terms of consumer demand in particular,” they added.

As a result, long-term economic growth and rising wages are the keys to Asian buying trends, Citi said. China and India make up some 27% and 24% of global demand, respectively, based on estimates from the World Gold Council.

“However, both nations tend to be sensitive to price changes, as we have seen continued buying erosion this year,” Citi added. “In terms of investment demand, Chinese gold ETF (exchange-traded-fund) holdings have risen dramatically YTD (year to date), reportedly outperforming strong inflows in global ETFs.”