Despite the global gold demand trade decelerated in the first quarter of 2013 compared from the year ago, the actual exchange of gold among small-time investors in the Middle East, India, and China was very much alive through jewellery in the same period.

Overall global gold demand dropped 13 per cent to a three-year low of only 963 tonnes in the last quarter compared from a year ago. However, overall demand for jewellery jumped 12 per cent in the first three months of the year compared with the same period in 2012, driven mainly by the appetite from the Asian markets.

China's jewellery purchases grew 19 per cent on the same period over last year, at 185 tonnes, while both India and the Middle East registered a 15 per cent hike in their jewellery appetite. In the US, where appetite for gold jewellery has waned since 2005, a renewed trend was seen as consumers bought small gold trinkets, registering a 6 per cent growth.

"The price drop in April, fuelled by non-physical moves in the market, proved to be the catalyst for a surge of buying that has left many retailers short of stock and refineries introducing waiting lists for deliveries," Marcus Grubb, the managing director of investment at the World Gold Council, said.

"Putting this into context, sales of bars and coins, jewellery and consumption in the technology sector still make up 81 per cent of the market."

The demand growth for gold jewellery in India, according to the WGC, was fuelled by rural households whose incomes benefited from a good late harvest. Moreover, the drop in local prices of gold over the quarter further prompted jewellery purchase during the wedding season.

Read: Gold Buying Festival: India Splurges on Gold as Prices Drop

Although the world's central banks remained the topmost buyers of gold, it was still not enough to surpass the year ago record. In fact, total global demand for gold in the first quarter of the year was likewise down 19 per cent from the final quarter of 2012.