With two weeks to go before the new year, gold prices look to end 2019 more than 15 percent higher – the biggest annual climb since 2010.

The rise in demand comes as investors worry about a possible downturn in equities amid global economic risks. The relatively low interest rates across the globe also contributed to gold's gains this year. 

But analysts say a more stable global economic outlook and an uptick in interest rates are likely to dampen demand for gold in the first half of next year. 

The World Gold Council's chief market strategist John Reade said that while there's been some pressure on gold prices due to a recovery in October and November in line with expectations for the global and U.S. economy, the outlook for gold prices in 2020 remains positive.

"Also, as we come to the end of the year, several financial companies tend to reduce their size of positions particularly after Thanksgiving in the U.S. I wouldn't expect those players to rejoin the market in January. In short, a bit of profit-taking. Nothing serious. Nothing to make us worry about the outlook for 2020," said Reade.

The World Gold Council said that overall world demand for gold rose three percent year-on-year during the first three quarters, mainly driven by increased holdings of exchange-traded funds by professional investors to hedge against the risks of an economic slowdown. At the same time, however, retail investors' demand for gold bars and coins has dropped off because of the resulting price rise.

Zhang Jinsong, vice general manager of China National Arts & Crafts Group Corporation, said that demand for gold bars declined about eight or nine percent this year because of lower consumer demand.

"Gold prices rose substantially in the second half of the year, and investors don't like to buy gold at high prices because the investment value is reduced. But whenever prices stabilize, the demand will go up. It's not an important problem, it's only cyclical," said Zhang.

Observers note that while recent price fall is attributed to positive economic expectations, the biggest issues remain in the UK, U.S. politics and uncertainties over China-U.S. trade frictions.

(CGTN's Chen Tong contributed to this story.)