Global demand for gold fell 14 percent in the first half of this year due mainly to a sharp decline in purchases by exchange traded funds, the World Gold Council said in a report on Thursday.

Central bank buying also fell slightly in the first half but purchases of bars, coins and jewelry grew thanks to strong demand in India and Turkey, the industry-funded WGC said in its latest Gold Demand Trends report.

Gold-backed ETFs saw record inflows last year to match a 30 percent rise in gold prices between January and June.

But with prices rising only around 8 percent in the same period this year, funds added only 56 tonnes in the second quarter, down 76 percent from last year, bringing first half inflows to 167.9 tonnes.

European ETFs accounted for 76 percent of first half inflows taking their holdings to a record 978 tonnes.

“This year demand is a little more balanced,” said Alistair Hewitt, the WGC’s head of market intelligence. “While we saw huge inflows into ETFs last year, the physical markets of jewelry, bars and coins slumped to multi-year lows.”

Total global demand for gold amounted to 2,004 tonnes in January-June, down from 2,318.7 tonnes in the same period last year. For the second quarter alone, demand was 953 tonnes, the lowest quarterly total in two years.

Source: Reuters UK