* Gold jewellery consumption lost 19% amid high prices
* Inlcuding OTC, total demand was the strongest for Q2
* Central banks demand rose, outflows from ETFs slowed
sharply
* Mine supply hit Q2 record, recycling rose to 12-year high

By Polina Devitt
       LONDON, July 30 (Reuters) - Global gold demand excluding
over-the-counter (OTC) trading fell 6% year-on-year to 929
metric tons in the second quarter as jewellery consumption
tumbled 19% amid high prices, the World Gold Council (WGC) said
on Tuesday.
    Spot gold prices are up 15% so far this year after
hitting a record high of $2,483.60 on July 17 amid increased
market expectations that the U.S. Federal Reserve will cut
interest rates in September.
    The second quarter "saw price sensitivity bite into
jewellery demand and it may be a while before consumers fully
adjust to higher prices", said the WGC, an industry body whose
members are global gold miners. 
    Gold jewellery consumption in April-June saw its weakest
second quarter since 2020, when demand was feeling the worst
impact of the COVID-19  pandemic, the WGC said.       
    However, total demand including the opaque OTC trading rose
4% to 1,258 tons, marking the strongest second quarter in the
WGC's data series going back to 2000.
    The WGC estimates the OTC flows - investment from
institutional, high-net-worth investors and family offices - at
329 tons, the strongest since final quarter of 2020.
    "Demand from this sector has been in response to concern
over the U.S. debt burden, geopolitical risks and attraction to
the strong price rise," it said.
    Global central banks, which actively bought gold in
2022-2023, increased purchases for their reserves by 6% to 183
tons in the second quarter. They are on track to slow buying in
full-2024 by 150 tons from 2023 but to keep them above the
pre-2022 level. 
    Physically-backed gold exchange traded funds (ETFs) saw
modest outflows in the second quarter and were heading for the
third consecutive month of net inflows in July.
    Bar and coin investment fell 5%, while demand for gold in
technology rose 11% "driven by the AI boom in the electronics
sector", the WGC said.
    On the supply side, mine production increased by 3% to the
second-quarter record, while recycling rose by 4% to the highest
for a second quarter since 2012.    
    Gold supply and demand by WGC*:    
                             Q2 2023  Q1 2024  Q2 2024        Q2
                                                          change
                                                         y/y (%)
             Supply                                             
                                                        
 Mine production               899.7    859.1    929.1         3
 Net producer hedging          -15.7    -24.5     -6.3         -
 Recycled gold                 324.0    348.5    335.4         4
 Total supply                1,207.9  1,183.1  1,258.2         4
                                                                
             Demand                                             
                                                        
 Jewellery fabrication:        494.1    534.4    410.6       -17
 - Jewellery consumption       479.4    479.1    390.6       -19
 - Jewellery inventory          14.7     55.2     20.0        36
 Technology:                    72.8     80.5     81.1        11
 - Electronics                  59.1     66.4     67.6        14
 - Other industrial             11.3     11.8     11.3         0
 - Dentistry                     2.4      2.3      2.3        -5
 Investment:                   252.6    200.4    253.9         1
 - Total bar and coin:         273.7    313.4    261.0        -5
   of which bars               164.0    223.3    183.6        12
   of which official coins      85.3     66.0     52.7       -38
   of which medals              24.4     24.1     24.8         2
 - ETFs/similar products       -21.1   -113.0     -7.2         -
 Central banks, other inst.    173.6    299.9    183.4         6
 Gold demand                   993.1  1,115.2    929.0        -6
 OTC and other                 214.9     67.9    329.2        53
 Total demand                1,207.9  1,183.1  1,258.2         4
 LBMA gold price ($/oz)      1,975.9  2,069.8  2,338.2        18
    * Source: Metals Focus, Refinitiv GFMS, ICE Benchmark
Administration, World Gold Council.

    
 (Reporting by Polina Devitt; editing by Gareth Jones)