The sharp rise in gold prices has dented demand from jewellers for the three months ended June 30.
The demand was down 32 per cent at 140 tonnes in the June quarter compared with 206 tonnes logged in the March quarter.
Interestingly, gold coin and bar sales rose 26 per cent to 108 tonnes (86 tonnes), according to the World Gold Council data.
Mr Lalit Jagawat, Proprietor, Nakoda Bullion, said, “sales have been hit because of high prices and investors are not seen in the market. Only a fall in prices can pull them back to the market.”
Global demand
Global demand was down 19 per cent at 750 tonnes (923 tonnes) as prices jumped nine per cent to $1,506 an ounce in the June quarter from $1386 an ounce logged in the March quarter.
On a year-on-year basis, the global demand was down 17 per cent at 920 tonnes in the June compared to 1,107 tonnes. The quarterly average price rose 26 per cent compared to the previous year.
India corners 32 per cent of the global demand. India was the strongest growth market in the second quarter with its total consumer demand rising 38 per cent.
In value terms, the demand increased 70 per cent to Rs 53,800 crore (Rs 31,730 crore).
Of this, jewellery accounted for Rs 30,290 crore in Q2 2011, an increase of 44 per cent compared with Q2 2010.
Promising quarter
Gold investment comprising demand for bars, coins and ETFs (exchange traded funds) accounted for 108.5 tonnes in Q2 2011, up 78 per cent over that of last year. Value-wise, gold investments delivered a return of 119 per cent with asset value increasing to Rs 23,510 crore (Rs 10,730 crore).
Mr Ajay Mitra, Managing Director (Middle East and India), World Gold Council, said the second quarter of 2011 has been excellent for investments in gold around the world, especially in India. With inflation reaching record numbers and equity markets turning volatile, gold continued to be popular for investors looking to diversify their portfolios and protect wealth.
Jewellery demand
Global jewellery demand in the second quarter was up at 442 tonnes, six per cent higher than the year-ago levels of 417 tonnes. During the quarter, jewellery demand from India, China and Turkey, which cumulatively accounted for about 60 per cent of the global jewellery demand, generated a combined growth of 16 per cent, although it was countered by the weakness in other markets, most notably those in the West, said the World Gold Council.