Gold imports by China in the last quarter of 2011 have overtaken those by India, recognized top global importer of the precious safe haven yellow metal, during the same quarter, and it is most possible that China will snatch that title from its neighbor and fellow Asian emerging economic leader this 2012.

According to the data from the World Gold Council (WGC), India's overall gold demand in the fourth quarter ending December 2011 dropped 42 per cent to 173 tonnes, compared to 298.6 tonnes in the same period of 2010. China, however, was able to sustain its appetite for the yellow metal, registering a consumption of the precious raw commodity at 190.6 tonnes, although a marginal increase, still it is reflect a growth over the 190.3 tonnes during the fourth quarter of 2010.

Analysts and experts see the latest data wont just be a seasonal thing between the two countries, or for China's gold appetite for that matter. Given its citizens surging income comes the parallel buying power that will equip them to buy jewelry and other gold-related investments, Albert Cheng, WGC Far East managing director, said on Bloomberg Television's "First Up."

"China, the world's largest consumer of energy and base metals, is set to displace India this year as the biggest gold user on an annual basis," he said.

Gold bars, coins and other gold-backed products have become popular investment options in China.

Data from WGC showed that year-on-year, India's gold appetite fell 7.0 per cent to 933.4 tonnes last year, compared with China which soared 20.0 per cent to 769.8 tonnes in the same period.

"There was a major boost to the overall demand from China, a trend we see continuing in the new year," Marcus Grubb, WGC's investment managing director, said.

"It is likely that China will emerge as the largest gold market in the world for the first time in 2012."

India, which purchases gold mainly for religious and ceremonial occasions, bought less of the yellow metal in 2011 due to a weak rupee. Buying gold, which is priced in US dollars, with a weak rupee is very expensive.

The Indian rupee had depreciated by 8.37 per cent, compared with the Chinese yuan which appreciated 0.2 per cent during the quarter ended December 2011.

Overall global demand for gold in 2011 jumped to 4,067.1 tonnes worth an estimated $205.5 billion, according to the WGC's Gold Demand Trends report. It was the first time global demand exceeded $200 billion and the highest tonnage since 1997. WGC attributed the increase to the investment sector where annual demand was placed at 1,640.7 tonnes, up five per cent over the previous record set in 2010 at a value of $82.9 billion. The pre-eminent markets in India, China and Europe fuelled the investment demand for gold in 2011.

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