China's retail demand for gold rose strongly in the fourth quarter against weakening appetite in most other countries.

Consumer demand was up 3 percent from a year ago to 116.3 tons in the last quarter of 2009 on the Chinese mainland, Hong Kong and Taiwan, the World Gold Council said yesterday, citing data from GFMS, a precious metals consultancy.

Retail investment in bars and coins added 17 percent year on year in the quarter while jewelry was flat.

The mainland stood out in underpinning both jewelry and investment demand.

"In China, gold demand in the fourth quarter followed the pattern that had been established throughout 2009 - solid gains from the mainland partially offset by weaker appetite in Hong Kong and Taiwan," said the gold council.

On the mainland, demand for gold jewelry picked up strongly in December as prices dropped below a high of more than US$1,200 an ounce.

Ballooning prices had put a brake on gold sales in the opening weeks of the fourth quarter.

"The price dip was timely, coinciding with the approach of the peak New Year gifting season. Further support for jewelry demand came from wedding purchases," the WGC said.

The Year of the Tiger is considered to be a "widow year" and unlucky for marriage, and many people would have chosen to get married in December and January rather than in the new year.

Retail investment demand was strong throughout last year, as more investors turned to the metal as prices rose and there were concerns over inflationary pressures.

"I've been buying gold bars for three straight years, and prices are always in a rising momentum. It makes sense to buy gold as an alternative investment," said Guo Ying, a local retail gold buyer.

Fourth-quarter sales also helped push up annual consumption. In 2009, total consumer demand for gold in China grew 7 percent to 461.9 tons.

"The main driver of this increase was the investment component, which recorded a rise of 18 percent. A 5 percent rise in jewelry demand was nevertheless very impressive, compared with a global decline of 20 percent," the gold council said.

Demand for physical gold investment products enjoyed robust momentum, with both banks and bullion houses reporting solid demand.

China was the sole non-Western country to witness an improvement in retail investment demand for gold in 2009.

Gold sales are expected to keep their momentum in China in the absence of a sharp fluctuation in gold prices, the WGC said.