China has overtaken India to become the largest consumer of Gold in 2013 as its gold consumption increased to 1,066 tonne, up 32% from last year, led mostly due to a sharp surge in buying of jewellery (29%) and bars and coins (38%). India's gold demand rose by 13% to 975 tonne for the year 2013 inspite of several import related curbs last year, said the WGC. However, appetite for gold in both emerging and developed markets continued as seen in the sharp rise in Turkey, Thailand, etc.

United States has the largest gold reserves in the world at 8,134 tonne comprising almost 26 percent of the total reserves in the world. This is followed by Germany which has 3,387 tonne. However, India ranks 10th on the list of the top countries in the world with reserves of 558 tonne, inspite of being the second largest consumer.

Last year, the Indian government imposed a range of measures to limit demand. Higher import duties, strict import quotas and restrictions on gold-related lending and coin sales led to a contraction of supply to the domestic market as the government attempted to reduce the current account deficit. This in turn led to a sharp rise in the smuggling of gold. IndiaSpend had reported earlier that the number of gold smuggling cases jumped 449% to 664 cases in 2013 (data till Oct) from 121 cases in 2010.