Private investor appetite stayed positive on physical gold in March, with buyers continuing both to outnumber and outweigh sellers, according to the latest Gold Investor Index from BullionVault.

Private investor appetite stayed positive on physical gold in March, with buyers continuing both to outnumber and outweigh sellers, according to the latest Gold Investor Index from BullionVault.

After falling in January to an 18-month low of 51.9, the index edged back from February's jump to 53.5 to end the first quarter at 53.0, slightly above December's figure of 52.9.

The index compares the number of BullionVault users adding to their gold holdings over those who reduce them (as a proportion of all gold-owning clients at the start of the month).

The firm said a reading of 50 would signal an equal number of net gold buyers and sellers amongst BullionVault's 50,000 global users (around 89 per cent of the firm's users live in North America or Europe).

"Gold prices averaged a six-month high in March, but physical bullion continues to look good value to private investors,” said Adrian Ash, head of research for the firm in London.

"The last four times sentiment on the Gold Investor Index gave a reading at this 53 level, BullionVault users were either net sellers of gold or flat over the month. With March adding to February's strong addition, customers have now bought back three-quarters of the 1.1 tonnes liquidated last spring, and at a discount averaging more than 8 per cent since then," said Ash.

The price of gold has fallen sharply since since a record level $1,920 in September 2011, partly due to the belief that the wind-down of US central bank money-printing would boost the dollar.

Since the second quarter crash of 2013, when the metal averaged $1,414.80 per ounce, dollar gold prices have averaged $1297.87 (London PM Fix). The average gold price across March 2014 was $1336.08, the highest monthly average since September.

Gold price gains of more than 7 per cent during the first three months of 2014 were cut on the first day of the second quarter with a low of around $1,278, the weakest since February (source: BullionVault). Despite new Federal Reserve chair Janet Yellen saying the US bank would maintain its monetary support for the US economy, the price only slightly recovered to $1,284.97 (12.00GMT).