The GFMS report also noted that the World jewellery fabrication demand fell 16% to a 15 year low of 2,280 tonnes in 2006. The reasons attributed to this are fluctuating gold prices and the increased affinity for stones, especially amongst the younger consumers. “Globally, gold demand was affected due to a shift toward lower gold weights and more gem-set ornaments. This led to the fall in jewellery segment,” says Philip Klapwijk, executive chairman, GFMS.

Gold jewellery is heading for a decline in its demand in India and is being preferred more during festive occasions. In 2006, gold demand dropped by 90 tonnes, according to the GFMS report.Gold purchase is limited as an auspicious and investment symbol in the country.

Gold experts and jewellery houses are noticing a preference for diamonds and other stones over gold, amongst the younger consuemrs. Gold however is yet a favourite for investment. “The price of the gold might deter people from going in for gold jewellery as a consumer but gold as an investment is still an exciting and a safe option,” mentioned an executive working with Kotak securities.