The demand for gold fell to its lowest level in two years in the second quarter of 2012, as the price rise along with the economic slowdown has deterred major consumers, India and China, from buying the yellow metal, the World Gold Council said Thursday. The global gold demand fell 7 percent to 990 tons from 1066 tons in the same quarter a year ago, its lowest demand level since the first quarter of 2010. In value terms, the demand for gold remained relatively stable at $51.2 billion compared to the previous year, as the average price of gold has increased 7 percent to $1,609.49 per ounce in the current quarter. The jewelry and investment demand fell globally by 15 percent to 418.3 tons and 23 percent to 302 tons respectively in the quarter under review. However, excluding India and China, the demand in the jewelry sector dropped only 4 percent and retail investment was up 16 percent annually in terms of tonnage. According to the World Gold Council's Gold Demand Trends report, challenging global economic conditions as well as the price of gold reaching a record high in the quarter have led to a decline in the demand. The demand for gold in India, the world's largest consumer, fell substantially in the quarter. The investment demand at 56.5 tons was less than half the level in 2011 Q2 and the demand for jewelry was down 30 percent on an annual basis to 124.8 tons in the same period. China's investment and jewelry demand stood at 144.9 tons, down 7 percent from 156.6 tons in the same quarter last year. The investment demand fell 4 percent year-on-year to 51.1 tons.

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