LONDON, Aug 16: Worldwide gold demand soared in dollar terms during the first half of 2006 as consumers paid higher prices, but sank in tonnage terms, the World Gold Council said on Wednesday.

Demand for gold slid by 16 per cent to 1,635.7 tons during the first six months of the year, compared with 1,950.5 tons in the same period of 2005, said the London-based organisation.

But in dollar terms, the value of global gold consumption leapt almost 16 per cent to a record $31 billion in the first half, compared with $26.8 billion, the WGC added.

Gold prices soared by 38 per cent over the first half. As a result of surging prices, which averaged almost $630 per ton during the second quarter, consumers have been forced to spend more cash on the precious metal.“Price volatility has, as expected, had a detrimental effect on demand in tonnage terms,” noted James Burton, WGC chief executive.

“However it is reassuring to see people are spending more on gold,” he said, adding that “sentiment towards gold has remained strong”.

Gold prices had hit $730.40 per ounce in London trading on May 12 this year, the highest level since 1980, as investor buying escalated amid geopolitical concerns, particularly over Iran's disputed nuclear ambitions.—AFP