Economic uncertainty in Europe and fear of a Greek default are turning people to buy gold bars and coins.
German investors have piled into gold bars and coins in the first quarter of the year as a hedge against European Central Bank policy and the threat of a Greek default bringing down the eurozone.
Latest figures from the World Gold Council show that Germans increased their buying of gold coins and bars of bullion by 20pc to 32.2 tonnes in the last quarter, the highest rate of purchases seen in a year.
The strong buying of gold – which is traditionally seen by investors as a safe-haven asset – was seen across Europe amid growing uncertainty over central bank policy and the standoff between Athens and its creditors.
“This was the strongest start in Europe for gold coins and bars that we have seen since 2011,” Alistair Hewitt, head of market intelligence at the World Gold Council told The Telegraph. “German investors are fretting over the ECB, Greece and Ukraine.”
On the wider market, the World Gold Council revealed that total demand in the first quarter fell 1pc to 1,079 tonnes compared with the same period last year.
Despite higher demand in Europe, Asia dominated the gold market in the first quarter with China and India accounting to for 54pc of consumer demand in the first three months of the year.
In value terms, gold demand in the first quarter stood at $42bn (£26.6bn), down 7pc compared with a year earlier. The average gold price of $1,218.5 per ounce was down 6pc on the average for the first three months of last year.
“The global gold market’s ecosystem functioned healthily during the first three months of 2015 illustrating the unique nature of gold and its ability to rebalance across sectors and geographies,” said Mr Hewitt.