"Annual demand recovered across virtually all sectors - the notable exception being ETFs, which saw net annual outflows," the WGC said.

According to the WGC, gold demand rose by 10% year on year in 2021, to 4021 tonnes, driven by a bounce back in jewellery demand.

Demand was particularly strong in the fourth quarter, up 40% year on year at a 10-quarter high of 1147t.

"Demand recouped much of the COVID-related losses sustained during 2020," the WGC said.

"Demand for gold in the consumer-driven jewellery and technology sectors recovered throughout the year in line with economic growth and sentiment, while central bank buying also far outpaced that of 2020."

"Investment demand was mixed in an environment of opposing forces: high inflation competed with rising yields for investors' attention."

Indian jewellery demand was particularly strong in 2021. Demand for jewellery is being boosted as the lockdown restrictions ease, and weddings and festivals resume.

The Indian jewellery market contributed 611t of demand in 2021, a six-year high, with record fourth quarter demand of 265t.

"Festivals and weddings were the driving force behind robust Q4 demand," the WGC said.

"Jewellery demand remained strong in October with festival purchases of Dussehra and Pushya Nakshatra, followed by a robust Dhanteras".

But ETFs were net sellers of gold over the year, with net outflows of 173t in 2021.

"These were heavily concentrated in Q1, coinciding with a sharp rise in US rates and risk-on investor appetite as newly developed vaccines were rolled out," the WGC said.