According to the “Gold Demand Trends – Second Quarter 2011” published by the World Gold Council, the global gold demand for the second quarter of 2011 dipped by 17 percent y-o-y in volume to 919.8 tonnes but rose 5 percent in value to US$44.5 billion, delivering the second highest quarterly value on record.

The WGC did note an improved demand from sectors like jewellery and technology but a rather weak investment demand. Despite the increase in prices during this quarter, which did affect concerns of consumers, when gold prices touched a peak of US$1541/oz and moved in the range of US$1,500/oz, the demand for gold jewellery rose 6 percent y-o-y in volume to 442.5 tonnes and in value was up by 34 percent to US$21.4 billion. The WGC notes demand drivers for this quarter were India and China, which together contributed to 55 percent of the global gold jewellery demand and 52 percent of global investment demand inn gold bars and coins. The WGC has pinned optimism that demand from both countries will be good in the next six months of the year, as the season of weddings and festivals usually marks a good demand in India, supported by a good monsoon and a better economic stability over the rest of the world markets.

Gold jewellery demand across major consuming centres of the world: On a year-on-year basis, the demand in China increased in volume by 16 percent, in India it was up 17 percent, in Hong Kong by 38 percent, in Japan it dipped 14 percent, in U.S. it dropped 8 percent, in U.K. it dipped 16 percent, in UAE demand dropped 1 percent.

The technology sector, which also saw good demand resulting in 2 percent increase in volume terms and 28 percent increase in value terms to US$5.7 billion. The investment sector (including all bars, coins, gold backed ETFs and similar products), dropped 37 percent I tonnage to 359.4 tonnes and by 21 percent in value to US$ 17.4 billion. Supply of gold was almost stable in comparison to the second quarter of 2010, with mine production up 7.8 percent to 708.8 tonnes.