Factors attributed to sudden rise in China's gold consumption are said to be deregulation of supply and deregulation of demand.
GMFS says China is fast complying with the WTO compulsions and further, gold smuggling has come down from almost 200 tons annually earlier that exceeded even the domestic production.
Besides, import duty on gold dropped to 20% in 2005, down from 23.5 percent, satisfying the WTO commitments.
Another survey revealed that the generation of the 1960s and 1980s has been seen lapping up gold jewellery, thus spurting the demand for yellow metal.
Further, the depreciating US dollar in recent years also prompted Chinese investment in gold and diamonds.
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