Gold demand dropped over the year in volume terms during the second quarter given the ominous rise in prices and a drop in offtake from the advanced economies like US, Japan and Italy though the overall trend remains firm and the demand is expected to pick up in the near term as Asian buying holds up, a latest update from the World Gold Council (WGC) noted today. In its quarterly Gold Demand Trends report, the WGC said signs of strength in the market remain concentrated in India and China, with buying of coins, bars, jewellery and gold-backed funds all declining in Europe and the United States. Overall gold demand fell 17% in the three months from April to June to 919.8 tonnes versus the year-earlier period, primarily on a drop in investment demand. However, in value terms, the demand was up 5% to US$44.5 billion- the second highest quarterly figure on record. Demand from gold-backed exchange-traded funds plummeted by a whopping 82% to 51.7 tonnes from 2010's extremely high levels. Meanwhile, strong buying in India and China also helped drive up second-quarter global jewellery consumption by 6 percent. Indian jewellery buying was up 17 percent to 139.8 tonnes, accounting to nearly a third of global gold jewellery demand. Demand from China also rose 16%.

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