Gold demand in the third quarter of 2011 reached 1,053.9 tons, an increase of 6 percent compared with last year, according to the World Gold Council’s Gold Demand Trends report.

According to the report, the total equaled $57.7 billion, an all-time high. The increase was driven by investment demand that rose by 33 percent year-on-year to 468.1 tons, generating record quarterly demand of $25.6 billion.

“Unsurprisingly investment demand for gold was a key driver during the third quarter. Increasing levels of inflation, the U.S. credit rating downgrade, a worsening Eurozone sovereign debt crisis and the lackluster performance of many assets drove investors to increase holdings in gold in order to protect their wealth,” said Marcus Grubb, managing director of investment at the World Gold Council.

Other findings in the report:

• Quarterly average price: $1,702.12, up 39%
• Global gold investment demand: 468.1 tons, up 33%
• Demand for gold bars and coins: 390.5 tons, up 29%
• Investment demand in Europe: 118.1 tons, up 135%
• Chinese jewelry demand: 131.0 tons, up 13%
• Jewelry demand in India: 125.3 tons, down 26%
• Gold recycling: accounted for 426.5 tons of supply, up 13%

Charts courtesy of World Gold Council

JCK