Last Friday, gold closed up 1.5 percent for the week to end at $1135.20/oz, thanks to a U.S. dollar that couldn't decide if it was strengthening or weakening. Of course, whether the gains continue remains to be seen, but for gold bugs, it seems one thing is certain: Gold demand has never been higher.

Or has it?

Last month, the World Gold Council released its annual supply and demand report on the yellow metal, and it revealed more than a few surprises.

2009: A Down Year For Demand

In reality, total gold demand actually fell in 2009, down 11 percent year-over-year. But due to the higher average price per ounce in 2009, the dollar value of gold demand remained roughly the same.

As we've previously discussed, demand for gold comes from lots of different places: ETFs, bars and coins, jewelry, dentistry, electronics and some minor industrial uses. And while some applications inherently drive demand more than others, it's interesting to see how demand has shifted from quarter to quarter.

ETF Demand: Not As Strong As Before

For starters, mom-and-pop investors in gold ETFs just aren't having that big an impact on gold's overall demand. In fact, so far in 2010, investment into gold ETFs has been sluggish: Bullion held by the SPDR Gold Trust (NYSE Arca: GLD) has fallen to 1,115.51 metric tons - down 1.6 percent for the year. That's a big change from the 45 percent inventory increase GLD saw last year.

But that 45 percent figure is misleading. Taken as a whole, 2009 was a great year for GLD and other gold ETFs, but quarter-to-quarter, the picture is less clear. As Lara Crigger discussed in last week's Riding The Gold Bubble, the majority of ETF demand hit in the first quarter, as lower gold prices and the hangover from 2008's market meltdown drove hordes of investors toward safe-haven investments. But it didn't last. ETF investment demand dropped precipitously over the next three quarters, and although it still rose 87 percent year-over-year in 2009, ETF demand long term is definitely on the wane:

Even those folks buying physical coins and bars backed off the gas pedal after the insane demand of the 2008/2009 fall and winter. As ETF investing dropped 67 percent from Q4 2008 to Q4 2009, so too did so-called bar hoarding fall 55 percent year-over-year. Even coin sales, which remain constrained by greater supply concerns, were down 8 percent year-over-year.

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