Gold demand fell by 83 per cent to 17.7 tonnes during January-March 2009 compared to the year-ago period.
“Total demand in India, traditionally the world’s largest gold market, declined significantly under pressure from record rupee prices and a major deterioration in the domestic economy,” World Gold Council (WGC) said in a statement while releasing the ‘Q1 2009 Gold Demand Trends’ report.
However, total demand for gold worldwide rose 38 per cent to 1,016 tonnes valued at 29.7 billion dollars in the first quarter of 2009. The figures in the report compiled by metal consultancy GFMS for WGC showed a record investment in exchange-traded funds (ETFs) across the globe with demand soaring 540 per cent to 465 tonnes valued at $13.6 billion
It said investment demand for gold, which includes ETFs and bars and coins, was the major source of growth in the quarter, reaching 596 tonnes, up 248 per cent. The report also said impact of recession on consumer discretionary spending continued to take its toll on both jewellery and industrial demand. Gold jewellery demand was down by 24 per cent, with most countries suffering a decline as consumers responded to the high and volatile gold prices, which reached record levels in some countries, compounded by difficult economic conditions.
Jewellery demand is unlikely to return to more positive territory in current market conditions. But the demand will grow as consumer confidence and purchasing power returns, he added.