Global demand for gold slumped in the second quarter of 2014 as jewellery purchases plummeted.
Consumers, central banks and investors bought up 964 tonnes of gold in the three months to the end of June, according to figures from the World Gold Council.
The demand was 16 per cent lower than the same period in 2013 and 10.2 per cent lower than the first quarter of 2014.
Apart from the final two quarters of 2013, this was the lowest level of demand since the end of 2009. The main reason was that jewellery sales fell 30 per cent compared with the same period in 2013.
The World Gold Council said the second quarter is “traditionally a quieter quarter for jewellery” but said the lower comparative purchases were affected by less consumption from India and China.
At the other end of the spectrum, central banks increased their gold purchases by 28 per cent compared with 2013, although their total purchases fell compared with the first quarter this year.
Investment in gold also declined relative to the first three months of this year as investors began once more to withdraw money from gold exchange-traded funds (ETFs).
There was a net outflow of $1.6bn (£960m) from gold ETFs in the second quarter – not as much as the huge outflows in 2013 but a deterioration from the relatively small outflow in the first quarter of 2014.
Marcus Grubb, managing director of investment strategy at the World Gold Council, said: “In the context of an exceptional year last year, where we saw record consumer buying and investor sell-offs, this quarter’s demand continues to demonstrate a return to long-term trends. Jewellery consumers continued to digest the exceptional purchases of 2013 and investors also rebalanced, pulling back from the extremes we saw last year. Overall, the gold market is stabilising.”
