However, it was down 4% for the the full year, doing so for the first time in three years.
The World Gold Council said that 4,405.5 metric tons were sold in 2012, down 176.8 metric tons, or 4 percent, from 4,582.3 metric tons in 2011. It's the first annual decline since 2009.
In India, full year demand was down 12% in comparison to the previous year. " Both jewellery and investment demand reached their highest levels for six quarters. Demand for jewellery was up 35% year-on-year to reach 153.0t, and strong retail demand led to 108.9t of investment buying. In India the prospect of duty increases, which came in to force in January 2013, may have added to strong buying in the final quarter to beat the anticipated price rises," the World Gold Coucil has said in its release.
Chinese demand was flat year-on-year, reflecting the impact of economic slowdown.
Central bank buying for the full year rose by 17% compared to 2011, totalling 534.6t, the highest level since 1964.
Marcus Grubb, Managing Director, Investment at the World Gold Council said: "China and India remain the world's gold power houses, and by some distance, despite challenging domestic economic conditions. In India, consumer sentiment towards gold remained strong despite measures aimed at curbing demand, reaffirming gold's role in Indian society. In an underdeveloped financial system in India, gold has an important role to play.