The demand for gold declined by 45% in the second quarter of the 2008
calendar year, due to high prices. The information has come from the
latest report by the World Gold Council.

In the same period
last year, the demand for gold was 296.1 tonnes, whereas during the
quarter of this year, the total demand was 161.4 tonnes. Thus, the
jewellery sector has experienced a fall of 47% to 118 tonnes from the
all-time-high demand of 223.1 tonnes in the corresponding period of the
last year. The demand of net retail also fell down by 41 percent that
comes up to 43.4 tonnes.

The sentiments of consumers were infected by the global economic downturn, with inflation at a 13-year high.

Many
consumers adopted the wait and watch policy, due to instability in the
price of gold, although the correction in gold prices from the first
quarter record-highs was positive.

The only ray of hope in
this gloomy quarter was the Akshaya Tritiya festival, which was
considered to be an auspicious day to buy gold and other metals. Even
the sales generated during this day were also lower than the last year.
It came to only 50 tonnes.

The demand of the consumers for the
first six months of the year was 263.5 tonnes as compared with 498.3
tonnes during the first half of 2007. The jewellery demand out of this
also accounted for 189.1 tonnes and retail investments were 74.4
tonnes.