Going by the World Gold Council’s (WGC) Q1’09 Gold Demand Trends report, gold demand in India plunged a whopping 83 percent in the 2009 first quarter, as compared to the same-quarter demand last year!

The Wednesday-released report said that the first-quarter import of gold in the world’s leading gold market fell to a mere17.7 tonnes largely due to higher prices – leading to record prices of gold in rupee terms – as well as ‘deteriorating’ domestic economic conditions.

In a statement to the effect, Aram Shishmanian, CEO of the WGC, said: “Jewellery demand is unlikely to return to more positive territory in current market conditions.”

In most countries the high and volatile gold price - which even touched record levels – together with difficult economic conditions, resulted a fall in demand for gold jewellery. Excluding China, - which managed to counter the widespread fall-in-demand trend with a 3 percent increase in jewellery demand - other countries reported a 24 percent drop in demand for gold jewellery vis-à-vis the year-before figures.

However, in the international scenario, investors held on to their preference for the yellow metal amid fears of price-rise and the continuing financial uncertainty – thereby leading to a overall year-on-year rise in the first-quarter demand for gold by 38 percent to 1016 tonnes. Speaking in value terms, there was a 36 percent increase in gold demand to $29.7 billion.