Demand for gold tumbled to a three-year low during the first quarter as hopes of a recovery in the global economy outweighed a surge in buying from China and India.
Global demand fell to 963 metric tons in the quarter, according to the World Gold Council, down from 1,107.5 tons a year earlier.
Prices had risen significantly over the past few years as investors sought a safe haven from riskier assets. However, the precious metal has now entered a bear market with equities gaining traction across the globe.
"There is clearly among some investors in the US a sense that the economic recovery in North America is becoming more sustainable and therefore they are… moving back into risk assets," Marcus Grubb, managing director of investment research at the council, told Bloomberg.
Gold hovered around the $1,407-an-ounce mark, a 16 per cent fall so far this year.
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