LONDON: Buying by central banks as well as Chinese investors seeking protection from a weakening currency helped lift demand for gold in the final quarter of last year and the trend looks set to continue, the World Gold Council said on Thursday.

China remained the world’s biggest consumer of gold last year, ahead of India, with economic headwinds influencing purchasing, the WGC said in its annual “Gold Demand Trends” report.

Chinese demand for gold coins surged 25pc in the fourth quarter from a year earlier as consumers sought to protect their wealth after Beijing devalued the yuan currency. But stock market turmoil and a slowing economy knocked consumer sentiment and Chinese demand for gold for jewellery fell 3pc from a year earlier, WGC said.

Jewellery is the biggest source of demand for gold globally and a slight dip in such demand meant overall demand for gold was virtually flat in 2015 at 4,212 tonnes.

Central banks have been buying gold to diversify their reserves away from the US dollar and their purchases edged up to 588.4 tonnes last year, second only to a record high 625.5 tonnes in 2013, the report showed.

Central bank buying accelerated sharply in the second half of last year and jumped 25pc in the fourth quarter, as the need to diversify was reinforced by falling oil prices and reduced confidence in the global economy, WGC said.

Published in Dawn, February 12th, 2016