Next year could prove the "high water mark" for the gold market, he added, depending on whether a resolution to the European situation and the prospect of a normalisation of monetary policy materialise. Gold has now been on a bull run for more than a decade. However in volume terms, investment in gold actually fell 10pc to 1,605 tonnes, as implied net investment - covering the demand from institutional investors and exchange-traded funds - collapsed by almost 90pc. GFMS attributed this to steep sell-offs in the futures markets, driven by profit-taking and liquidity squeezes, which meant people cashed in on their gold holdings. In contrast, it was a bumper year for physical investment - people buying bars - which leapt by 37pc to a record 1,209 tonnes in 2011. Words to go in here please on two lines to go here Gold was trading at around $1,660 an ounce in London on Wednesday.