China outpaced India in terms of gold consumption in 2013 according to the Thomson Reuters GFMS Gold Survey.

The influential report said Chinese demand increased by 32 percent within a year, reaching 1,189.8 tons in 2013, which marks a fivefold increase since 2003, the Financial Times reported.

The increase was mainly driven by purchases of Panda coins, gold bars and jewelry, the report said.

The lion’s share of sales came from high purity 24 carat gold products bought mostly for investment reasons rather than as jewelry. The same reason led the 'kilobars' and smaller weight investments, setting a new record of 366 tonnes, which was 47 percent more than in 2012. As for gold coins, only Turkey minted more than Beijing last year.

“Gold has always been popular culturally in China, and now it’s increasingly seen as an asset class for individuals,” Andrew Leyland, the manager of precious metals demand at GFMS said. “Greater wealth and disposable incomes created pent-up demand when prices were high, so when they dropped there was this phenomenal surge in buying.”

Thomson Reuters GFMS forecasts an average price of $1,225 for a troy ounce for 2014, which is nearly $20 below the current level. Physical demand remains sustainable, “but without a repeat of the bargain hunting surge."

Besides becoming the biggest gold consumer, China has also become its world’s major gold producer with total estimated output at 437.3 tons, which is more than 9 percent of the global supply last year.