The London-based group said demand exceeded 5000 tonnes for the first time, reaching a record 5002 tonnes.
Uncertainty in markets worldwide drove investors to seek a safe haven in the valuable metal, with investments reaching an "unprecedented value" of $US555 billion by the end of the year.
According to the WGC, securities backed by physical gold were particularly in demand. Investors around the globe turned to gold exchange-traded funds or ETFs in search of a safe haven and diversification, increasing their holdings by 801 tonnes over the course of the year.
Meanwhile, bar and coin buying "accelerated to reach a 12-year high," with demand reaching 1374 tonnes or $US154 billion.
The strongest growth in demand for bars and coins was seen in China and India, with both countries accounting for more than 50 per cent of the increase in this category.
Central banks remain important drivers of demand for gold, as they seek to make their reserves less dependent on the US dollar. The industry association estimates that central banks have increased their gold reserves by 863 tonnes.
In contrast, demand for gold jewellery weakened significantly last year due to high prices.
Since the start of the year, gold has already become around 30 per cent more expensive, after rising by 65 per cent last year.
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