The demand for gold has seen prices soar to help sales hit a record high of £153 billion in 2012.
However, the volume of gold sold fell 4% in 2012 to 4,405.5 tonnes, according to the World Gold Council (WGC).
Prices were fuelled by demand from India and China, the world’s biggest consumers of gold, and also by central banks.
Global demand in the last quarter of 2012 saw demand reach 1,195.9 tonnes, a rise of 4% on 2011.
The sales of gold in that quarter are the highest fourth quarter ever recorded and worth around £43 billion.
The WGC says the rise in demand from institutions partially offset a decline in consumer demand.
Gold power houses
Marcus Grubb, the World Gold Council’s managing director, said: “Despite challenging domestic economic conditions, China and India are, by some distance, the world’s gold power houses.
“Consumer sentiment for gold in India remains strong despite government measures to cool demand there, which reaffirms the role gold plays in India.
“In China demand for gold increased by 24% in the last quarter and that’s despite the predicted economic slowdown.”
He added that central banks have switched from being net sellers of gold to becoming net buyers.
Mr Grubb explained: “The global official sector purchasing of gold is now running at their highest for nearly 50 years to make annual demand 30% higher than the previous decade’s average.”
Figures from the WGC reveal that demand from investors and jewellery makers was at the highest for six quarters – jewellery alone fuelled a 35% year-on-year rise.
In India, a surge in demand was led by investors wanting to beat higher duty rates on gold.
Prices nudge up
Central banks around the world also stepped up their buying of gold, usually seen as a haven investment in times of economic turmoil, and their purchases were up 17% compared to the year previously.
The banks have now been net buyers of gold for eight consecutive quarters as they continue to build up their national reserves.
The figures revealed by the WGC also show that central banks bought 534.6 tonnes of gold – the largest amount since 1964.
The increase in the volume sale of gold saw prices nudge up to $1,721.8/oz – that’s 1% higher than the previous high recorded in quarter three of 2011.
Gold’s high price keeps demand in check, but the WGC says buyers and jewellers are urged to recycle gold – though not at the same levels seen in the peak of 2011. The amount of recycled gold has returned to 2009 levels.
