(Adds details, gold prices)
NEW YORK, April 29 (Reuters) - The sharp rise in gold prices in 2002 boosted global investment demand for the yellow metal to a 35-year high, but cut its use in fabricated products, precious metals research firm CPM Group said on Tuesday.
In its Gold Survey 2003, CPM reported that investors bought 26.9 million ounces of gold bullion on a global net basis during 2002. That was the most in any year since 1967, more than doubling the 10 million ounces purchased the year before.
"The dynamics of the market are that investors, stimulated by international financial, economic and political conditions, raced to buy gold last year," CPM said in its report.
Spot gold finished 2002 worth about $350 an ounce, after starting last year at around $278. On Tuesday, spot was quoted at $333.45/334.15 in afternoon trade.
But the use of gold in jewelry, electronics and other fabricated products last year fell 11.2 percent to 91.5 million ounces, its steepest decline since gold prices spiked to $825 an ounce in 1980 as investors bumped consumers out of the market, CPM said.
The report also said that mined production of gold in 2002 fell 5.5 percent to about 63.1 million ounces. The research firm projected 2003 mine output of 61.7 million ounces, off 2.2 percent.
Total gold supply rose 2.2 percent last year to 106.1 million ounces, CPM said. It forecast 2003 total gold supply at 101.2 million ounces, down 4.6 percent.
The rise in prices also stimulated increased supply from scrap last year, CPM said. Secondary recovery from old jewelry and other scrap jumped 18.3 percent in 2002.