What is more disturbing for the gold producers is that even the die-hard gold lovers Indians seemed to be staying away, if not moving away, from their most loved metal during this time of the year. Even when demand is said to be stable, official gold imports in India during the second quarter of 2000 declined to 132 tonnes, down from 168.5 tonnes in the same period of 1999.

Notwithstanding normal monsoon and a growing Indian economy, year-on-year gold demand growth in India was curbed for a number of reasons, said `Gold Demand Trends' the latest quarterly report released on Thursday by the London-based World Gold Council (WGC).

According to WGC, there was a noticeable decline in weddings across the country in the first half for, in the Hindu calender the year 2000 has few auspicious dates for marriages, when traditionally much gold is purchased. This trend is seen continuing throughout the year, WGC said. On the global front, the overall demand for gold during first half of 2000 was down to 187.8 tonnes, down 26 per cent from a year ago levels.

Said WGC report: "The demand for gold as an investment during the second quarter at 93.7 tonnes, 22 per cent below the level of a year ago, with a sharp fall in sales of new coins in the US accounting for almost all the decline. US coin sales last year were exceptionally high on Y2K concerns. Elsewhere in the world, investment demand held steady."

Despite this situation, WGC chief executive officer Haruko Fukuda commented: "The strength of worldwide demand for gold during the second-quarter and the first half of 2000 is encouraging, especially in the face of continued weakness in the demand for gold as an investment. Physical demand often experiences some seasonal weakness during the first half of the year, and yet demand was maintained n spite of both a higher average price of $280 an ounce during the period and the fact that the price remained well above the 20-year lows reached last summer."

Accordingly, gold demand continued to hold steady during the second-quarter of 2000 in the countries monitored by WGC. The demand was placed at 789 tonnes, just 2 per cent below the level of the second-quarter of 1999.

Demand for jewellery in the second-quarter was 695.3 tonnes, 1 per cent above the second-quarter of 1999, bringing jewellery demand to 1,396.4 tonnes, up 4 per cent from 1999 levels.