Outflows from gold exchange-traded products in the second quarter of the year led to a record sell-off of the underlying gold holdings, as investors became more confident about the US economic recovery, according to the World Gold Council.

A sell-off in gold that is held to back ETPs helped to push global demand for gold down 12% year-on-year to a net 856 tonnes bought in the second quarter, according to the trade group's most recent report, as hedge funds and other investors reduced their positions in ETPs tracking the precious metal.