According to the latest quarterly report by the World Gold Council, Jewellery demand declined by 21 per cent year-on-year in the first quarter of this year to 445.4 tonnes, the lowest quarterly demand on record since 1993.
"The 121.5 tonnes decrease in total jewellery demand was largely attributable to a sharp drop in demand in the Indian market, which was almost 70 tonnes below year earlier levels," the report stated.
It further pointed out that the upsurge in price volatility during the quarter came as no great surprise as the gold market in India is very price sensitive.
The other factors responsible for the decline in gold demand are currency movements and economic growth, the report said.
Meanwhile, India also accounted for the 35 per cent year-on-year decline in retail investment for the first three months this year to 72.7 tonnes, according to GFMS (formerly, Gold Fields Mineral Services), an independent precious metals consultancy, it said.
The report said, India's contribution to the decline in net retail investment in Gold was the highest in terms of volume, which fell sharply to 31 tonnes, just over half the level of investment demand seen in quarter one last year.
