Good times are ahead for gold investors, if a latest report on gold prices is of any indication.

A report from the World Gold Council says that rising demand for luxury goods from India and China may drive the gold prices to a new peak in the next year.

"Demand in India, the world's largest buyer of the metal, rose by half in the first quarter from a year earlier, while demand in China gained 31 percent," said the London-based Council.

It said the purchases, accounting for about 75 percent of gold demand, jumped 17 percent to 573 tonnes as consumers grew more comfortable with gold above $650 an ounce.

Demand from India rose to 211 tonnes and Chinese demand rose to 90 tonnes.

Australian-based consultancy firm Westpac Banking Corp supported the Coucnil's report saying "China is a major emerging market, there is tremendous wealth building up among the middle class there, as it is in India."

It said gold for immediate delivery may trade above $700 (Rs28,700) an ounce at the end of this year. Gold has averaged $659.34, so far this year after reaching a 26-year high of $730.40 last May.