The World Gold Council has released the Q1 2012 Gold Demands Trend report.

Gold demand grew 16% over the past 12 months to 1,098 tonnes which had a value of just $59.7bn spent on gold in the entire world in Q1 2012.

While global demand was down 5% from the record high of Q4 2011, it was significantly higher than demand in Q1 2011 suggesting that demand may be consolidating at these higher levels.

Investment Demand

Investment demand again dominated as under owned gold continues to be diversified into and accumulated globally.

Gold investment demand (all demand for gold bars, coins and ETFs and similar products) grew by 13% year-on-year to 389.3 tonnes in Q1 2012, equating to a demand value of just US$21.2 billion.

The key drivers of this increase came from China and ETFs. Global demand was boosted by China posting a quarterly record of 98.6 tonnes of investment demand up 13% from Q1 2011. This increase was a result of investors’ continued move to preserve wealth amid ongoing concerns over inflation.

Probably the most important aspect of demand and one of the most important fundamentals in the gold market is that of still very robust and increasing Chinese demand.

The World Gold Council report can be found on WGC’s website here.