Gold demand down to 2 year low

Global demand for gold has fallen to its lowest level in two years owing to less buying in the main markets of India and China, despite rising demand from central banks, the World Gold Council said Thursday. Worldwide demand fell 7.0 percent year-on-year in the second quarter of 2012, down to 990 tons worth an estimated $51.2 billion, with gold prices on average 7.0 percent higher than a year earlier, said the council's latest report. Reduced demand for gold from jewelry, investments and technology sectors offset the rise in buying from global central banks amid economic uncertainty. Chinese consumption fell 7.0 percent year-on-year to 144.9 tons due to "broader economic issues", the council said, while India saw a much sharper decline, with demand down 38 percent from a year earlier to 181.3 tons. The report blamed weak economic sentiment, a depreciating rupee and record domestic prices, with Indian gold costs hitting a record high of Rs. 30,000 per 10 grams in the quarter. India and China, which have both been battling high inflation, account for about half of the world's gold demand combined, and China is forecast to overtake India as the market leader by the end of the year.