Demand for gold sank to a 5½-year low in the second quarter of 2009 with jewellery buying weakened by global economic recession.

"The global economic downturn has had a major impact on the purchasing power of gold consumers, as have high local prices and dollar volatility," said Aram Shishmanian, chief executive of the World Gold Council. The council yesterday released its Gold Demand Trends report for the second quarter.