Private investors took advantage of attractive gold prices to add to their holdings last month, according to the Gold Investor Index compiled by BullionVault, the online gold and silver exchange.

October’s index reading came in at 56, up from 52.5 in September. This marked its third successive monthly gain, and its strongest reading since May. (A reading above 50 indicates there are more buyers than sellers, with the converse the case below 50.)

Dollar gold prices fell by 3.2 per cent during October, disrupting a steady run of four monthly gains, and gold priced in euros fell 3.7 per cent. Meanwhile the gold price for UK investors - accounting for around half of the 42,500 people using the online exchange - fell 2.9 per cent, BullionVault said.

"The drop in gold prices during October gave investors the chance to 'buy the dip' and add to their positions at a lower cost. Although both the UK and US released better-than-expected GDP figures last month, the higher reading for the Gold Investor Index suggests that, at a grassroots level, not everyone is buying the idea that things are getting better. The number of self-directed investors adding gold to their portfolio as crisis insurance continues to grow," said BullionVault economist Ben Traynor.

More than 42,500 people have now used BullionVault to exchange physical gold and silver. Between them, they own £1.07 billion worth of gold bullion ($1.72 billion) – more than is held by most of the world's central banks – plus a further £214 million ($345 million) in physical silver. BullionVault users now collectively own more than 1 million ounces of physical gold.