Demand for the previous metal suffered over the quarter to the end of June negative sentiment in Asia outweighed a pick-up in appetite in Europe and the US, according to the World Gold Council.

Global gold demand hit a six-year low in the second quarter of 2015, mainly due to lower demand in India and China, according to a new report from the World Gold Council.

Demand fell 12 per cent year-on-year to 914.9 tonnes in the three-month period as India's consumer demand fell a steep 25 per cent after extreme weather conditions hit agricultural incomes. Meanwhile, jewellery demand in China came under pressure from the country's stock market turmoil and sluggish economic growth.

“It’s been a challenging market for gold this quarter, particularly in Asia, on the back of falls in India and China. The reverse is true for western jewellery markets, as increased economic confidence led to continued growth in consumer demand,” said the WGC's head of market intelligence, Alistair Hewitt.

The precious metal's “safe haven” status appeared to re-emerge in Europe, where consumer demand jumped 14 per cent over the second quarter as investors sought security amid Greece's debt crisis. Bar and coin demand for the region grew by 7.3 tonnes, compared to average declines of 1.7 tonnes across all other markets.

US jewellery demand recorded more subtle growth, rising two per cent year-on-year. The WGC said the “slightly erratic nature of US economic recovery” hindered more convincing growth, but it expects demand to gain momentum as even lower prices feed through to consumers.

Over the last year, it declined from $1,278 per ounce to $1,118 per ounce, according to online precious metals trading platform BullionVault. The more recent drop since the end of June is expected to spark a revival in demand over the second half of the year.

The WGC also highlighted India's upcoming wedding and festival season as a driver for healthier market growth. 

“In addition, falls in the gold price have historically triggered buying in price sensitive markets and we are already seeing early indications of this across Asia and the Middle East,” Hewitt added. 

“Conversely, sharp falls in Chinese stock markets have shaken the largely consumer investment base and we are seeing early indications of interest in buying gold again – all illustrating the unique self balancing nature of gold demand and the diverse drivers which underpin it.”