Gold prices may be rising, but the precious metal is failing to attract investors as concerns about policy normalization by central banks weighs on demand and creates a conflicted outlook for the commodity.
Demand for gold-based exchange traded funds (ETF) fell 76 percent in the last quarter, according to the World Gold Council's latest gold demand trends report.
"Last year's growth was solely down to record ETF inflows, while consumer demand slumped. So far this year we have seen steady ETF inflows in Europe and the U.S., jewellery demand has recovered with good growth in India, while retail investment and technology demand is up too," Alistair Hewitt, head of market intelligence at the World Gold Council, said in a press release.
The report found demand for gold slowed 10 percent to 953 tonnes in the second quarter compared to the year before, and 14 percent to 2,003 tonnes in the first half of 2017. Other sources of demand, such as for jewellery, technology, and from central banks increased, as did demand for physical gold bars and coins.
These areas of demand tend to increase in response to gold prices, and are unlikely to drive gold prices higher, according to Adrian Ash, director of research at BullionVault, says told CNBC via email.
"Asian small-bar and coin demand, like jewellery and even central-bank demand, typically rises on falling or flat prices," he told CNBC via email.
"Larger investor interest is needed to push gold prices higher. For that, the long-delayed correction or bust in world stock markets looks the most likely trigger."