Gold demand drops 16% led by declines in India to China

London: Gold demand fell 16% in the second quarter, led by declines in India and China, the World Gold Council said. Global demand slipped to 963.8 tonnes from 1,148.3 tonnes a year earlier as jewellery purchases fell to the lowest since the fourth quarter of 2012, the London-based council said on Thursday in a report. China fell behind India as the largest consumer, with global jewellery buying dropping 30% and bar and coin demand down 56%. Mining companies hedged 50 tonnes as they continued selling future output. Gold slid 28% in 2013, the most in three decades, as investors lost faith in the metal amid expectations US policy makers would cut stimulus as the economy strengthens. Last year’s price drop spurred jewellery, coin and bar demand, particularly in China. Indian bullion buying has slowed as the government restricted imports to curb a current account deficit. “Buyers in China and India were waiting to see a price trend develop,” Marcus Grubb, managing director of investment strategy at the council, said by phone on Wednesday from London. “It’s a market still returning to its fundamentals. It was an exceptional year and quarter last year.” Gold for immediate delivery traded at $1,312.28 an ounce by 7:17am in London on Thursday for a 9.2% gain this year, according to Bloomberg generic pricing. It averaged $1,290 in the second quarter, down 9% from a year earlier and little changed from the first quarter.