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Global demand for gold last year has declined despite record investment inflows on the back of US dollar gold price rallying to a six-year high.

According to the World Gold Council (WGC)’s latest ‘Gold demands Trends’ report, global demand for the commodity slid by 1 per cent to 4355.7 tonnes last year from 2018.

Gold demand also fell by 19 per cent to 1045.2 tonnes during the December quarter compared with the previous corresponding period.

This is attributable to the drop in jewellery demand and investment in gold bars by two consuming giants China and India due to high and more volatile gold prices.

WGC stated while the first half of 2019 was characterised by resilience and growth across most sectors, it was followed by widespread weakness in the second.

Central bank buying also slowed in the second half, a reduction of 38 per cent in contrast with the first half’s 65 per cent increase.

“However, this was partly due to the sheer scale of buying that had been seen in the preceding few quarters,” WGC stated.

“Annual buying nevertheless still reached a remarkable 650.3 tonnes – the second highest level for 50 years and only six tonnes less than in 2018.”

The yearly supply of gold increased by 2 per cent to 4766 tonnes. This came purely from recycling and hedging, as mine production slipped by 1 per cent to 3436.7 tonnes, according to WGC.

“Looking ahead, we expect gold’s safe haven qualities to remain at the forefront of investors’ minds as they navigate global tensions, low yields, and stretched equity valuations,” WGC head of market intelligence Alistair Hewitt concluded.