After keeping away from the market in the first quarter of 2009, gold buyers have once again returned in the second quarter despite the pressure on jewellery buyouts due to high prices and the economic downturn, the World Gold Council said.
According to the Q2 09 Gold Demand Trends report released on Wednesday by WGC, 'investment demand for gold remained very strong in the second quarter of 2009, rising 46 per cent on year-earlier levels as investors continued a flight to quality'.
However, it noted that, the demand for gold despite being very high on a historical basis, was overall down by 9 per cent in Q2 09 from the levels of a year-earlier. A 6 per cent decline in dollar value terms to $21.3 billion.
"The global economic downturn has certainly had a major impact on the purchasing power of gold consumers, as have the high local prices and dollar volatility," WGC CEO Aram Shishmanian said.
In India, despite domestic economic pressures and sustained near record local gold prices, second quarter gold demand recovered from the exceptionally weak levels witnessed in the previous quarter, rising from 17.7 tonnes in Q1 2009 to 109 tonnes in Q2 2009.
However, total demand remained well below year-earlier levels. Total gold off-take was down 38 per cent on Q2 08, with jewellery, the largest component of demand, falling 31 per cent, WGC said.
