Despite pressure on the economy and high gold prices, investor demand in the metal has remained strong in the second quarter of 2009, says the World Gold Council (WGC).

Demand has increased 46 per cent on year earlier levels, although these figures still represented a nine per cent decline on last year's levels.

The WGC's Q2'09 Gold Demand Trends report showed that the total identifiable investment demand for gold, including through exchange traded funds (ETFs) and bars and coins, remained strong.

Industrial demand, however, continued to suffer with a 21 per cent fall compared to year-earlier levels, although the sector saw a 19 per cent quarter-on-quarter gain, which the WGC said reflects a significant improvement in the other industrial and decorative and electronics components.

"This is another excellent quarter for gold demand as gold's unique properties and broad demand and supply base continue to sustain a vibrant market and support the price," said Aram Shishmanian, CEO of WGC. "Although demand failed to match the exceptional levels seen in previous quarters when the economic and financial crisis was at its peak, demand nevertheless remained very robust throughout the quarter. Investment demand, in particular, witnessed a strong quarter and we believe this indicates a growing recognition of gold as an important and independent asset class.

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