The number of people buying gold in the first quarter of 2014 eased, new statistics have revealed.

World Gold Council (WGC) data showed total demand for the three-month period was fractionally lower at 1,704 tonnes – down from 1,077 tonnes in Q1 2013 – with consumers comprising 853 tonnes.

The organisation said it is “unsurprising” consumer demand slipped this year, after the gold price slump caused record levels of buying worldwide in 2013.

However, investment in gold remained above the five-year quarterly average of 850 tonnes and was broadly in line with historical benchmarks.

Marcus Grubb, managing director of investment strategy at the WGC, said 2013 was an “exceptional year”, but precious metal sales are now returning to steady demand levels.

“It is clear that the longer term underpinnings of the gold market – such as jewellery demand in Asia – remain firmly in place demonstrating the continuing resilience of the gold market and the unique nature of gold as an asset class, rebalancing to reflect demand,” he explained.

Invest in gold

There were also notable changes in the market for private investment in gold. Total demand was largely the same at 282 tonnes, compared with 288 tonnes in the same quarter last year.

However, bullion bars and coins dropped 39 per cent from 2013 figures. According to the WGC, this coincided with the first rise in quarterly average gold prices since the fourth quarter of 2012.

In other words, private investors may have been encouraged to wait for clearer signs of emerging gold trends before confirming an investment strategy.

This suggests more activity could be on the horizon depending on which way the markets move.

India’s impact on investment

Bullion bar and coin investment was particularly affected by lower consumption in India, with the country’s demand falling 54 per cent to 45 tonnes.

The precious metal had a turbulent year in India in 2013, following the introduction of higher import duties.

Gold coming into the nation had originally been taxed at 2 per cent, but levies had reached 10 per cent by the end of the year.

Increased charges aimed to lower India’s budget deficit, which looks to have succeeded, and industry commentators have suggested import duties are likely to come down again in the near future.

However, the move to raise taxes saw criminal activity increase as more people tried to smuggle gold into the country in an effort to avoid paying.

The All India Gems & Jewellery Trade Federation also criticised the government’s decision to hike levies, adding that it is “bleeding” the industry of stock.

Haresh Soni, chairman, told the Press Trust of India in February: “If the government does not relax the import norms […] the sector is going to witness a major setback.”