Gold demand at a record high

Guess what drove gold demand to grow 0.4% to 4,0671.1 tonnes, a level not seen since 1997.

Investment, followed by jewellery and technology sourcing, drove gold demand to reach roughly worth $205.5 billion.

Central banks also snapped up the valuable commodity, which helped defuse the price pressures from increased gold mine production, according to the new 2011 Gold Demand Trends report from the World Gold Council.

"2011 marked another impressive year for global gold demand, with investment demand showing strong growth and both jewellery and technology sectors remaining resilient," said the World Gold Council.

"Mine production increased slightly, to a record annual level, but this was counterbalanced by a small decline in recycling and considerable net purchases by central banks," it said.

"Annual demand totalled 4,067.1 tonnes (+0.4% year-on-year) worth an estimated US$205.5bn. Demand for gold bars and coins accelerated, reflecting a blend of positive influences including concern over the financial health and future viability of the euro area; high inflation in some countries; positive price expectations; and the relatively poor performance of a range of alternative investments," it added.

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Tags: Gold demand 2011, gold investment, gold production