The overall gold demand during the second quarter of 2013 stood at 1,148 tonnes, the World Gold Council Q2 Demand Trends report said.
In value terms, gold demand in Q2 2014 declined by 24 per cent to USD 40 billion compared to Q2 2013.
"Looking at an exceptional year last year where we saw record consumer buying and investor sell-offs, this quarter's demand continues to demonstrate a return to long-term trends, illustrating the uniquely balanced nature of the gold market.
"Jewellery consumers continued to digest the exceptional purchases of 2013, and investors also rebalanced, pulling back from the extremes we saw last year," WGC Managing Director of Investment Strategy Marcus Grubb said.
Overall, the market is stabilising following the extraordinary conditions seen in 2013, he said.
The Central bank purchases rose 28 per cent year-on-year to 118 tonnes from 92 tonnes in the corresponding quarter last year.
The report said it was the 14th consecutive quarter in which Central banks were net purchasers of gold, driven by factors like continued diversification away from the US dollar and the ongoing geopolitical tensions in Iraq and Ukraine.
Total bar and coins demand fell by 56 per cent during the second quarter to 275 tonnes from 628 tonnes in the same quarter of the last year.
In Q2 2014, many investors were uncertain about the direction and momentum of the gold price, while traders in price sensitive markets were far less active due to low volatility, it said.
However, the quarter did see an improvement in investor sentiment towards Electronically Traded funds (ETFs) compared to the last year.