MUMBAI - Beijing becoming host to Asia's first automatic gold vending machine - in a continent where millions are yet to see the variety that spews paper cash and potato crisps - offers the latest indication of China and India being world's leading gold buyers, despite record fluctuating prices mid-September.
Year-on-year consumer demand for gold in 2010-2011 grew 38% in India and 25% in China, compared with a 7% worldwide growth of gold sales. Global prices are around US$1,650 an ounce after hitting an historic high of $1,921.15 on September 6 on a 6%-plus rise since June.
Accounting for over 55% of global craving for the noble metal, India and China ensure gold remains a trusted refuge of
investment in an ailing world economy, weakened further with the deepening debt crisis in Europe and United States.
On September 25, China joined the United States, Germany, Italy and the United Arab Emirates, in having ATMs that dispense bullion and gold coins. In Beijing's 800-year old Wangfujing shopping district, buyers can now use bank cards and cash to induce the machine to pop out certified gold.
A scanner attached to the ATM recognizes the two-dimensional bar code in each gold bar or coin dispensed. The scarlet and yellow ATM with a touch screen dispenses gold bars and coins of various weights. Prices are based on current market rates and updated every 10 minutes.
Each withdrawal at the Wangfujing ATM is capped at 2.5 kilograms of gold, worth about $156,500. The gold ATM will have no shortage of audience - each day, over a million people visit this 1.5 kilometer stretch from East Changan Street to the China Art Museum.
Gongmei Gold Trading, the company that installed the ATM, expects to install an astounding 2,000 more of such gold-vending machines across China.
"To put residents' cash deposits into gold deposits can reduce cash flow and reduce pressure on commodity prices," Gongmei company president Zheng Ruixiang told state-owned China Daily.
Li Weizhou, operations manager of Gongmei Gold Trading, expects the gold-doling ATMs to be a big hit in China. The plan is to install more of the same in private clubs, banks and landmark buildings in major Chinese cities. By November, the Chinese gold-vending machines are expected to include a gold buy-back facility.
Mumbai might soon join this gold ATM club. India is the world's largest consumer of gold, followed by China, and its overall jewelry market, including diamonds, is estimated at $101 billion, with 60% of it being domestic sales.
India's thirst for gold seems to be growing, having bought a record 963.1 tonnes of gold in 2010, 66% more than the previous year. China consumed 579.5 tonnes of gold, a 27% hike in annual sales, according to data from the London-based World Gold Council.
The world too is seeking more monetary security in gold, buying 919.8 tonnes of the shiny metal worth $44.5 billion in the second quarter of 2011. It was the second-highest ever quarterly value recorded, says the latest World Gold Council's Gold Demand Trends (GDT) report released in August. It was fractionally below a record $44.7 billion in the last quarter of 2010.
India is estimated to own over 18,000 tonnes of gold, about 11% of the global stock. The approximately $1.1 trillion worth of gold nearly equals the $1.2 trillion net worth of its equity markets.. read more>>
