The All Blacks were particularly impressive in the period immediately after half-time, but Gatland paid tribute to his side for the way they fought back in a thrilling finale.

"I though they dominated the game in the third quarter but the pleasing thing was that we finished strongly," he said.

Fly-half Daniel Carter, who overcame a calf muscle injury to play, booted 14 points for the All Blacks while hooker Andrew Hore scored a 56th-minute try.

Wales relied on four penalties from Carter's opposite number Stephen Jones, and despite putting the visitors under severe pressure late on they are now without a win in this fixture since 1953.

"In the changing rooms after the players were gutted and maybe previously they would have been happy with that scoreline,” added Gatland.

"We think we are closing the gap to the top sides and it was a good performance, but the challenge for us is to improve on that and it is important we keep improving through the rest of this series.”