In India, retail demand for gold also declined 18% to 296 tons as import quotas aimed at diminishing the country’s current account deficit pressured demand.

Consequently, GFMS calculates that physical gold buying among retail, central bank and investors could decline 15.9% to 4,174 tons in 2014, compared to the record 4,957 tons last year. The analysts also expect gold prices to average $1,250 per ounce over the remainder of the year, with any dips to find support from increased demand out of Asia and the Middle East. [Bearish ETFs for Gold’s Lost Luster]

COMEX gold futures were hovering around $1,227 per ounce Thursday.

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For more information on the gold market, visit our gold category.

Max Chen contributed to this article.