LONDON (Commodity Online) : India, the world's largest gold consumer accounted for 30 percentage of the global gold jewelry demand.

According to World Gold Council, jewellery was dominated by India, with demand of 123t or 30% of the world total, just down from the 32% market share of Q1.

China came second at 75t or 18% of total, with the Middle East as a whole taking third position with 61t or 15%., the WGC said in a report.

These three between them thus accounted for 260t of gold jewellery demand in Q2. This is some way short of their 314t in the first quarter of the year, but broadly in line with the 264t of Q2 2009.

For the first half-year these three between them sustained an increase of 129t or 29%.

The sector as a whole contracted by 14% or 65t over the quarter, compared with an 18% quarterly gain in 2007 and a 16% gain in 2008.

The year 2009 was anomalous due to the state of the world's economy, with Q1 demand contracting sharply and laying the foundations for a weak year overall.

Jewellery demand in the first half of 2010 reached 882t, compared with 760t in H1 2009 and 972t in H1 2008, while in the second quarter it was down by 5% from Q2 2009.

The WGC makes the point that on a rolling four-quarter basis this was the smallest decline since the first quarter of 2008, indicating a deceleration in the pace of decline in global jewellery demand.

In dollar terms, global demand increased by 23% year-on year, with only five markets experiencing a decline the dollar value of gold jewellery offtake, WGC added.