Indian demand for gold falls on soaring prices in Q2; WGC

Although the global demand for gold picked up in the second quarter, demand from India, the largest buyer of the metal, fell 38 per cent to 109 tons, with demand from the jewellery industry, the largest consumer of gold in the country,  falling 31 per cent due to soaring prices.

In India, despite domestic economic pressures and prices soaring to record levels, second quarter demand for gold recovered from the exceptionally weak levels witnessed in the previous quarter, but remained well below year-earlier levels, according to the Q2 2009 Gold Demand Trends report published yesterday by World Gold Council (WGC).

The WGC said that although global demand for gold remains very high on a historical basis, total demand in Q2'09 was down 9 per cent on previous year levels. Global consumption fell 8.6 per cent to 719.5 metric tons from a year earlier.

Globally, investors bought 222 tonnes of gold, an increase of 46 per cent over the previous year, but below the extreme highs experienced in the previous three quarters when the economic and financial crisis was at its peak.

Germany was the biggest investor in gold with demand of 28 tonnes, the US with 23 tonnes and India with 21 tonnes.

Demand from industrial sector like electronics, decorative and dentistry declined by 21 per cent to 93.1 tones from the earlier year. The sector experienced an 18-per cent quarter-on-quarter gain for the first time after the last three quarters.