Demand for gold was up 20 per cent in China and 27 per cent in India, on the same quarter last year.

In value terms, gold demand in the first quarter was $51 billion, down 23 per cent compared to the last quarter of 2012. The average gold price of $1,632/oz was down 5 per cent.

Total jewellery demand was up 12 per cent year-on-year in the first quarter, driven in the main by Asian markets. Jewellery demand in China was up 19 per cent on the same period last year and stood at a record 185 tonnes, while demand in both India and the Middle East was up 15 per cent. Demand in the US rose for the first time since 2005 (6 per cent).

Bar and coin sales, were up 22 per cent in China and 52 per cent in India, year-on-year. In the US, demand for bars and coins was up 43 per cent compared with the same quarter in 2012.

Gold held by gold-backed exchange-traded funds, which in 2012 accounted for 6 per cent of the world’s gold demand, fell by 177 tonnes.

Central banks remained significant acquirers of gold, making purchases in excess of 100 tonnes (109 tonnes) for the seventh consecutive quarter.

“The price drop in April, fuelled by non-physical moves in the market, proved to be the catalyst for a surge of buying that has left many retailers short of stock and refineries introducing waiting lists for deliveries. Putting this into context, sales of bars and coins, jewellery and consumption in the technology sector still make up 81 per cent of the market," said Marcus Grubb, managing director of investment at the World Gold Council.

“What these figures show is that even before the events of April, the fundamentals of the gold market remain robust with growing demand in India and China, central banks consistently adding gold to their reserves and strong buying of investment products such as gold bars and coins,” he added.