Candelaria Mining Corp T.CAN

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Gold, fresh from striking record highs at thestart of this month, will enjoy buoyant demand this year, particularly fromChina and India, the World Gold Council said in a report on Thursday.



"The resilience of gold during recent volatility in the commodities marketexemplifies the strength of the global gold market and its unique demanddrivers," said Marcus Grubb, Managing Director of Investment at the WGC.



"High levels of investment demand across the world, strong demand in Indiaand China, the continued strength of the technology sector together withcentral bank purchasing demonstrates gold's diverse demand drivers.



"We anticipate continued strong demand during the rest of 2011,"Grubb said.



Gold spiked to a record $1,577.57 per ounce on May 2,as the safe-haven precious metal was lifted by a weak dollar, low US interestrates and concerns over high inflation.



However, the metal has since tailed off slightly, amid a wider commoditiessell-off, and it stood at $1,489.10 in Thursdayafternoon deals.



"Prevailing global socio-economic conditions will continue to driveinvestment demand for gold," the WGC said in its quarterly report.



"These include: continued uncertainty over the US economy and the dollar,ongoing European sovereign debt concerns, global inflationary pressures andcontinued tensions in the Middle East and North Africa.



"Sustained momentum in Chinese and Indian jewellery demand will underpingrowth in the jewellery sector throughout 2011.



"Strong demand in India during the recent Akshaya Tritiya festival and thebeginning of the wedding season, alongside extensive purchasing on dips in thegold price, underlines the strength of the Indian market."



At the same time, the WGC predicted that more central banks would buy gold asthey seek to diversify reserves into assets that are deemed to be less risky.



The precious metal scored a series of record peaks throughout the first threemonths of 2011 when the WGC said global demand increased by 11 percent to 981.3tonnes, compared with 881 tonnes in the first quarter of 2010.



In dollar terms, gold demand soared by almost 40 percent to $43.7 billion inthe first quarter, compared with $31.4 billion previously.