HONG KONG (AP) - China is poised to become the world's biggest gold market this year as demand surges for the precious metal, an industry group said Thursday.
The amount of gold bought in China rose 20 percent in 2011 over the year before to 770 metric tons, the World Gold Council said in its annual report. That put China behind only first-place India, where 933 metric tons were bought.
The council said it's "likely that China will emerge" as the world's largest gold market for the first time in 2012.
Rising incomes in China, which is the world's No. 2 economy, have resulted in a surge in demand for gold jewelry and other luxury goods. Gold is also a popular investment and hedge against inflation because there are a lack of other investment options in China.
China became the world's largest market for gold jewelry in the second half of 2011 as demand rose in every quarter, the council said. Demand for gold as an investment in the form of bars and coins and for use in electronics is also growing in China.
The price of gold hit a record nominal high of $1,891.90 an ounce in August, though prices have fallen since then. Gold for April delivery ended trading in New York on Wednesday at $1,728.10 an ounce.