BIRMINGHAM(BullionStreet): Britain's UK hallmark said country's four assay offices hallmarked 246,993 items in February, down 14% from a year earlier.

According to data from Birmingham assay office, hallmarking dropped to the lowest since at least 2007 as higher local prices helped curb demand.

That's the lowest on record for data going back to January 2008, when monthly figures were first collated.

Britain's economy shrank 0.3% in the fourth quarter as exports fell and an uncertain outlook depressed company investment, government data showed on February 27.

Gold's average of 1,048 pounds ($1,582) an ounce so far this year is 2.5% below the record quarterly average in the three months through March 2012.

"There is no doubt that hallmarking figures are still dropping in volume due to high precious metal prices," Marion Wilson, marketing director at the Birmingham assay office, said.

"Despite volumes being down, the value of the bullion being processed through the four UK assay offices has been higher in the past three years than ever before, showing that in value terms the market is resilient even in the tough economic climate."

Jewellery items sold as pre cious metals in the UK must be hallmarked by an assay office to confirm that they meet a legal standard. The practice is one of the earliest forms of consumer protection and dates back to 1300 when a statute of Edward I instituted the testing and marking of precious metals.

Gold traded at $1,576.15 an ounce by 11:14 am on Wednesday in London and is down 5.9% this year, after rallying the past 12 years, the best run in at least nine decades.

Priced in pounds, it's up 1.3% since the beginning of January. The UK hallmarked 316,692 silver items in February, down 3% from a year earlier, the data show. Platinum hallmarking slipped 2.2% while for palladium it increased 3%.