Global gold demand slumped to a six-year low in the second quarter as consumers in China and India continued to pull back on purchases of gold jewelry, coins and bars despite bullion's multi-year low prices.
Overall demand totaled 915 tonnes, a 12 percent decline from the same period last year, according to the World Gold Council's (WGC) latest demand trends report, published on Thursday.
"It's been a challenging market for gold this quarter, particularly in Asia, on the back of falls in India and China," said Alistair Hewitt, head of market intelligence at the WGC – a marketing body for the gold industry.
In China, slowing economic growth and severe fluctuations in the domestic stock market soured appetite.
"On the one hand, rallying equities drew attention away from discretionary purchases of items such as gold jewelry as consumers poured disposable income into chasing stocks higher," WGC said.
"On the other hand, the sharp reversal in stock markets in late June damaged sentiment, wiping out the capital gains made by late joiners to the rally and leaving consumers less inclined to spend their disposable income on jewelry, among other things."
Meanwhile, in India demand was impeded by unfavorable weather conditions – which hit rural incomes – as well as a dearth of auspicious days for marriages in the third quarter.
These two markets accounted for almost half the fall in global demand, WGC said.
Global demand for gold jewelry was down 14 percent on year to 513 tonnes. India's jewelry demand plummeted 23 percent to 118 tonnes, while China's fell 5 percent to 174 tonnes. Jewlery is the biggest source of demand for gold.