It has become increasingly clear over the past week that the fall in the gold price was triggered by speculative traders operating in futures markets, and buyers are viewing this as an opportunity to purchase gold, according to the head of the World Gold Council.

Aram Shishmanian, the council’s CEO, said on Friday that the short-term view of speculative traders aiming to generating a profit was in stark contrast to that of long-term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday’s further decline.

The surge in gold purchases is spanning markets from India and China to the United States, Japan and Europe.

"We are already seeing shortages of bars and coins in Dubai, while premiums in Mumbai are at $26 per ounce and $6 in Shanghai, indicating that buyers are willing to pay more than current spot prices for the metal," said Shishmanian.

"Our view is that demand is strong while supply remains constrained, and that this dynamic ultimately drives the long-term price of the metal."