The price of wholesale gold rallied from fresh six-week lows at $1,641 per ounce on Thursday morning, rising as European stock markets fell after much-worse than forecast economic data.
Silver meantime stalled below $31 per ounce as industrial and energy resources cut earlier gains.
Economic output across the 17-member state Eurozone contracted by 0.6% in the fourth quarter of 2012, the worst drop since the depths of the global recession four years ago.
Gold prices for Euro investors today jumped €16 per ounce from yesterday's near eight-month low at €1218.
U.K. gold investors saw the price rise to £1060 as U.K. government debt prices fell again, nudging 10-year gilt yields up to 2.27%, their highest level since last April.
"The outlook for gold demand remains strong in 2013," reckons Marcus Grubb, managing director investment at the World Gold Council, launching the market-development body's latest Gold Demand Trends report today. "We expect jewelry demand to remain buoyant, driven largely by wealth creation in India and China, and the re-synchronization of economic growth in both countries."
Altogether in 2012, global gold demand was the second-highest on record, down 4% by weight from 2011 but rising 2% by value to $236 billion.
Gold supply slipped 1%, as new record mine output met falling supplies from existing above-ground stocks.
So-called "scrap" supply fell 3% for 2012 as a whole, despite average gold prices rising more than 6% to an annual record of $1669 per ounce.
"The main drag on gold prices [so far this month]," wrote INTL F.C.Stone's Ed Meir in a note on Wednesday, "is the fact that we are seeing money move into industrial metals, corporate bonds, sovereign paper and equities. "[That is] leaving much less of the investment pie available for gold and silver."
But if "examined in a longer term context," says today's World Gold Council report, "annual gold demand was 15% higher [in 2012] than the average for the previous five years, with much of that growth coming from the physical bar segment of investment demand and central-bank purchases."
Central banks as a group bought a 5-decade record of 534 tonnes in 2012, raising their US Dollar spend on buying gold for their currency reserves by 24%.
Despite rising prices, gold jewelry demand also rose by value, up 3% to a new record of $102.4bn.
"That clearly illustrates that gold is capturing an increasing share of wallet," says the report.
Studying the World Gold Council data, "[Indian] purchases were clearly brought forward in anticipation of import duty hikes," says Eugen Weinberg's team at Commerzbank today.
A flattening in Chinese demand left India as the world's #1 consumer yet again, defying many analysts forecasts.
Japanese households became net buyers of gold for the first time since 2005, albeit of just 7.6 tonnes, with the dis-hoarding of private investment holdings slowing sharply as the new Abe administration vowed to weaken the Yen to reflate the economy in the fourth quarter.
Soros Fund Management – which raised its allocation to gold by one-half in the third quarter of 2012 – has made about $1 billion in profits betting on the Yen's 20% fall since November, according to the Wall Street Journal today.
Fellow gold investors David Einhorn at Greenlight Capital and Kyle Bass at Hayman Capital Management have also made "big trading profits" betting against the Japanese currency, the WSJ adds.