The World Gold Council has predicted robust demand for gold in the remainder of 2010 on the back of accelerating demand from India and China, as well as increasing investment demand driven by continuing uncertainty over public debt and economic recovery.
Total demand in Q2 2010 rose by 36 per cent to 1,050 tonnes, an increase of 77 per cent in US$ terms to $40.4 billion.
Marcus Grubb, managing director, investment at the WGC commented, ''Over the past quarter, demand for gold jewellery in key Asian markets has been challenged by rising local prices.
Nevertheless, we are seeing a deceleration in the pace of decline in demand, providing a strong outlook for ongoing recovery in this crucial market segment.''
Investment demand was the strongest performing segment during the second quarter, posting a rise of 118 per cent to 534.4 tonnes compared with 245.4 tonnes in Q2 2009.
The largest contribution to this rise came from the ETF segment of investment demand, which grew by 414 per cent to 291.3 tonnes, the second highest quarter on record.
Physical gold bar demand, which largely covers the non-western markets, rose 29 per cent from Q2 2009 to 96.3 tonnes.