Gold News

Germans Buy Gold Despite Record Prices

GERMAN investors continue to Buy Gold in large quantities – despite Euro Gold Prices setting new all-time records, according to a leading precious metals refiner.

"Irrespective of what the Euro is doing, German investors do not seem to be scared of the current price levels," says a note German refining group Heraeus.

The price to Buy Gold in Euros set a new intraday record Monday at €36,959 per kilogram (€1149 per ounce) – 0.4% above its previous all-time high, set on 18 July.

Heraeus draws comparisons with the global financial crisis of 2008-2009 – as well as early 2010, the period that culminated in the first Greek bailout.

"We again have a situation where good private demand is affecting delivery periods for Gold Bars. Manufacturers of bars and coins are working under severe pressure to reduce the mountain of orders."

One difference between now and then is, Heraeus notes, the current tendency to Buy Gold in larger quantities.

"Demand is mainly for the larger bars, starting from 1 ounce up to the 1 kilo bar," says Heraeus.

"This is different to the situation during the above mentioned two periods when, at times, all possible sizes and forms of gold were sold out."

Heraeus points out the supply bottlenecks are not a consequence of gold market illiquidity.

"More-than-enough raw material is available," it says.

"The bottlenecks are usually caused by insufficient production capacity."

German demand to Buy Gold bars and coins came in at 37.7 tonnes for the first three months of 2011 – more than double the figure for the same period last year – according to figures published by the World Gold Council.

Germans are not the only European investors looking to Buy Gold. News agency Bloomberg reports stores in Lisbon are selling out of Gold Coins, while South Africa's Rand Refinery – operator of the world's largest refining complex – says its gold Krugerrand sales are at the highest level for nearly a year.

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