Low gold prices in the third quarter attracted bargain hunters the world over, with U.S. buyers grabbing far more coins and bars than they did in any other quarter over the past five years.
"There were significant gains in bar and coin demand in China and across Europe, but it was in the U.S. where we saw the most dramatic growth, with U.S. Mint Eagle sales reaching their highest level since the second quarter of 2010," Alistair Hewitt, head of market intelligence at the World Gold Council, said.
According to the World Gold Council's Gold Demand Trends report released Thursday, global gold demand rose 8 percent on-year to 1,121 tons in the third quarter, with the U.S. clocking robust consumer demand growth of 62 percent.
Third-quarter U.S. demand for bar and coins in particular was up 207 percent from a year ago to 33 tons, the highest level since 2010.
Global jewelry demand also picked up, in what is traditionally a quiet time of the year for the segment. A jump in jewelry purchases was particularly pronounced in India, where consumers took advantage of low prices in July and August to bring forward purchases for October and November's Diwali festive season, sending on-year jewelry demand up 15 percent.
In China, investment demand grew by 70 percent to 52 tons.
"China and India remain the dominant figures in the global gold market, accounting for close to 45 percent of total demand. But what was particularly noticeable this quarter is that the consumer response to the price dip was a truly global occurrence," Hewitt said.
Europe also witnessed strong levels of demand for investment in the safe haven asset due to ongoing concerns about the Greek debt crisis and uncertainty over the outcome of the migrant crisis that is embroiling Eastern Europe. European demand climbed 35 percent to 61 tons in the September quarter.
Central banks were also buying, with purchases reaching 175 tons, near the record high level for the same period last year.
Gold prices, meanwhile, may have further to slide. The spot gold price fell to a near six-year low Thursday, hitting $1,074.26 an ounce, its weakest point since February 2010. The precious metal has fallen more than 5 percent this month, as an upbeat October U.S. jobs report boosted expectations the Fed will raise interest rates this year, a move that will make yield-bearing investments more attractive than holding gold.
But London-based Capital Economics said in a note that it remained positive on gold in the medium term, with supply balancing demand. While the price could hit $850 an ounce in "the worst case scenario," prices were more likely to find good support a little below current levels, Capital Economics said.
A strong recovery in prices though will rest on markets digesting the first interest rate hike from the U.S. Federal Reserve, the research house added.