Nov. 2 (Bloomberg) -- Gold jewelry manufacturing in India, the world’s largest buyer of the metal, may shrink as younger people in the country buy less of the metal, according to the World Gold Council.

“If you go to India now, some of the 20-year-olds aren’t wearing jewelry,” Aram Shishmanian, chief executive officer of the World Gold Council, said today at a conference in Edinburgh.

India’s gold demand dropped 38 percent in the second quarter, with jewelry purchases down 31 percent from a year earlier, according to the World Gold Council based on figures from London-based research company GFMS Ltd. Higher prices have contributed to the drop in India’s demand, and encouraged sales of used gold products for scrap, Shishmanian said.

Gold rose to a record $1,070.80 an ounce on Oct. 14.

To contact the reporter on this story: Nicholas Larkin in Edinburgh at nlarkin1@bloomberg.net

Last Updated: November 2, 2009 09:16 EST