Gold Q2 demand falls 12% on lower appetite in Asia: WGC

Gold demand declined 12% globally to a six-year low of 914.9 tonnes in the second quarter, mainly due to a decrease in demand from consumers in India and China, according to the World Gold Council.

The demand stood at 1,038 tonnes in Q2 of 2014, the WGC Gold Demand Trends report for Q2 of 2015 showed.

However, demand in Europe and the US grew, driven by a mixture of increasingly confident jewellery buyers and strong demand for bars and coins, the report added.

"It's been a challenging market for gold this quarter, particularly in Asia, on the back of falls in India and China. The reverse is true for western jewellery markets, as increased economic confidence led to continued growth in consumer demand," WGC Head of Market Intelligence Alistair Hewitt said.

He said investment demand for the quarter remained muted, given the continuing recovery in the US economy and booming stock markets in India and China during the quarter.

The overall jewellery demand was down 14% at 513 tonnes, from 595 tonnes in 2014, due to fall in consumer spend in Asia, the report said.

While in China the fall in jewellery demand was 5% at 174 tonnes due to slow economic growth and a turbulent stock market, in India it dropped 23% to 118 tonnes following heavy unseasonal rains in Q1 and drought in Q2 that impacted rural incomes and affected gold demand.

In addition, a dearth of auspicious days for marriages in Q3 meant that wedding-related demand was unusually slow.

The US remained steady, with jewellery demand going up for the sixth consecutive quarter by 2% at 26 tonnes.

In Europe, demand was also up, with Germany up 7% and the UK and Spain both growing 6%.

The jewellery demand for higher grams of gold is an evolving trend seen both in Europe and the US, mostly taking a cue from the east, WGC Managing Director, India, Somasundaram PR told PTI here.