The research by the World Gold Council, an industry think-tank, said that leading analysts, including some notable bears of the market, were starting to turn bullish after the collapse of the dollar over recent weeks. Some analysts are forecasting the gold price could rise from $295.3 an ounce yesterday to $320 an ounce next year.
"The extensive gold sales by individuals across much of East Asia last year and earlier this year were widely misinterpreted as evidence that ordinary people who once had set store by gold had lost their confidence in it," said Gary Mead, head of research at the WGC's centre for Public Policy Studies.
"The reverse was true; they had bought gold largely as a defence mechanism against hard times, and when those hard times arrived and their local currencies collapsed, gold helped them to survive."
On Tuesday a major Japanese bullion house, Tanaka Kikinzoku Kogyo, said its sales of gold bars in September were 40 per cent up on August and 129 per cent more than in September 1997.
Poland disclosed in August that it had added 74.5 tonnes of gold to its reserves, adding support to the view that the trend towards central banks off-loading gold may be starting to reverse. Total demand world-wide was up 50 per cent in the second quarter on the first quarter.
Analysts say that fears of wholesale dumping by central banks of their gold reserves has been one of the main factors behind the steep fall that led to gold touching a 19-year low earlier this year.
Since the dollar's precipitate fall last week gold has risen through the US300 mark although it was trading just below that at US297 yesterday.
However, the current crisis has triggered a flight from other stores of values regarded as safe, such as treasury bills and government bonds, making some bankers think again, says Mr Mead.
The gold market has been particularly concerned by a recommendation last year by an expert committee in Switzerland that the Swiss National Bank, which is the largest holder of gold reserves in Europe, should re-value its reserves and free-up some 10 billion Swiss francs to be sold on the open market.
However, the Swiss authorities have made it clear that the sales could not happen before a referendum and would, even then, have to be dribbled out so as to avoid provoking a market collapse.
The earliest that a referendum could be held is November of next year. The timetable could slip as far as spring 2000, making it unlikely the sales of 1200 tonnes could start before 2001. Switzerland has 83.28 million ounces of gold in its reserves, equivalent to nearly 9 per cent of its gross domestic product.
Britain, by contrast, has just 18 million ounces, accounting for just half of one per cent of UK GDP.
The other threat to the gold market comes from the European Central Bank, which in January takes charge of the 11 economic and monetary union participants' gold reserves.
The ECV has said it wants gold holdings to account for 15 per cent of total reserves, which implies that several countries, notably France, Germany and Italy, will see a substantial rise in their gold holdings which they may wish to sell.Reuse content