Private investor sentiment towards physical gold rose in October to reach a six-month high, but 2013's earlier flood of selling retreated further, according to the latest Gold Investor Index from online precious metals exchange BullionVault.

BullionVault's index rose to 54.3 last month from 53.0 in September, the highest since April. A reading of 50 would indicate a perfect balance of buyers and sellers.

However, October's six-month high was below the level of 56.0 a year before. The Gold Investor Index peaked at 71.1 in September 2011.

BullionVault said that the number of users starting or adding to their gold holding increased slightly from September last month, but it was a 15 per cent fall in the number of net sellers which pushed the Gold Investor Index higher. Overall, net buyers outnumbered sellers better than two-to-one.

"Washington's short-term fix to the debt ceiling confirms there's no will to tackle spending or money printing long term. October's drop in the gold price let savers build their insurance at lower cost. With world stock markets now at five-year highs, average monthly gold prices have fallen in 10 of the last 12 months. That's something not seen since the bull market began in early 2001," said Adrian Ash, head of research in London.

By weight, BullionVault user gold holdings grew slightly in October. In aggregate, they have now regained more than half the 1.2 tonne liquidation from record holdings of 33 tonnes seen between April and June, ending October at 32.4 tonnes.