Customers flock to buy gold accessories at a gold store on sale in Taiyuan, Shanxi province July 6, 2013. REUTERS/Jon Woo this summer fuelled a gold bar and coin "buying spree" in the country as investors sought to shelter themselves from further market volatility, according to the World Gold Council.

Lower gold prices pushed up overall gold demand by 8pc in the third quarter to 1,120.9 tonnes compared with a year earlier, following an early sell-off by Western investors anticipating a US interest rate rise.

"Having trudged a little wearily through the first six months of the year, the gold market started the third quarter with a jolt," it said in its quarterly gold demand trends report.

"The US dollar gold price dropped to a five-year low and consumers were spurred into action."

Bar and coin demand jumped by 33pc during the quarter to 295.7 tonnes, according to the council, led by a 70pc year-on-year increase in Chinese investment. Jewellery demand rose by 6pc to 631.9 tonnes.

Alistair Hewitt, head of market intelligence, said demand among Chinese investors was driven by the combination of the sharp price drop and the Bank of China's decision to devalue the renminbi in August .

"Gold will always be an asset of choice for Chinese investors and savers.

"A lot of retail investors now want to own something tangible, something real, something which they understand." Alistair Hewitt

"The price dip, the stock market turmoil, the depreciation of the yuan - it gave people an opportunity to reappraise their outlook and as a result you saw surging growth in bar, coin and jewellery demand," he said.

The council also said the appetite for physical gold soared in the US, where demand for Eagle coins rose to levels not seen since the financial crisis.

In Europe, investors continued to plough their money into physical gold amid fears that the Greek crisis would return or Russia's recession would deepen.

UK demand for bar and coin jumped 67pc to 2.5 tonnes as the Royal Mint extended its offering of gold and silver bullion to investors .

Mr Hewitt said the financial crisis had changed the risk appetite among investors, especially in advanced economies.

"The world's changed since 2008, especially attitudes towards financial markets," he said.

"A lot of retail investors now want to own something tangible, something real, something which they understand, and gold is something that taps into these strong emotions, which is why we've seen such strong demand in Europe."

The council said Russia continued to "lead the pack" in terms of central bank purchases.

Mr Hewitt said strong demand was "entrenched" and was likely to continue in the coming months, even as the council cautioned that overall demand was likely to be weaker in the final three months of the year.

"Festival and wedding purchases were brought forward to take advantage of the price dip. Therefore demand towards the end of the year is likely to be correspondingly affected," it said.