Trends report shows demand fell 17% year-on-year compared to 2010.
The World Gold Council (WGC) has released its most recent Gold Demand Trends report, which shows that despite the strong market for gold as an investment, actual demand has fallen 17% in the second quarter.
The report shows that, compared to the same three-month period in 2010, demand for gold has dipped dramatically. In Q2 of 2011 gold demand totalled 919.8 tonnes, while demand for the same period last year totalled 1,107 tonnes.
Despite overall demand being down, China and India continue the trend as emerging consumer and investor markets, with gold demand increasing 25% in China and 38% in India compared to Q2 in 2010.
The report explains the reason for continued investment, even if at a lower overall level, with the strengthening price. “The impact of the European sovereign debt crisis, the downgrading of US debt, inflationary pressures and the still-fragile outlook for economic growth in the west are all likely to drive high levels of investment demand for the foreseeable future."
In the UK, gold prices have affected jewellery designers and retailers, with many having to keep a close eye on shelf prices of products and the giving of quotes for commissions. It seems that demand for investment may have dropped, but the value has not.
The WGC report shows that gold prices have reached near-record levels in value terms in Q2, and have grown 5% year-on-year to £27 billion. Today, the gold price stands a $1,798 (£1,087) per ounce, having broken the $1,600 (£968) mark in July.