Investors in India, the world's largest gold consumer, sold 17 tonnes of bullion in the first quarter of 2009, marking its first disinvestment ever, while investment demand plunged more than 70 percent in Vietnam on import restrictions, industry data showed on Thursday. China, the world's second-largest consumer, saw demand for investment falling to 16.1 tonnes in the first quarter from 16.7 tonnes in the same period last year, according to the World Gold Council. "In a trend that emerged across much of the non-Western world, retail investors in China chose, on balance, to take profit on holdings of gold bars and coins as prices returned to levels close to $1,000," the WGC said in a report. But jewellery demand rose 2.9 percent to 89.1 tonnes in the first quarter because of festive seasons such as Lunar New Year and Valentine's Day as well as the country's relatively strong economy despite the global economic downturn Gold powered to an 11-month high above $1,000 an ounce on Feb. 20, not far from a record of $1,030.80 hit last March, as investors sought a safe haven from turmoil in the financial markets. Gold was at $940.40 an ounce on Thursday, up $3.30 from New York's notional close. India's jewellery demand suffered because of high prices and a slowdown in the economy, with consumption falling 52 percent to 34.7 tonnes in the first quarter of this year. "The first quarter of 2009 was an exceptional one for India as a 'perfect storm' of events resulted in the lowest quarterly demand for gold jewellery in at least 20 years, while retail investment demand turned negative for the first time on record."

Source