Gold News

Gold Investing 1/3rd More Popular in Covid Pandemic

But new gold buying seasonally soft in summer 2021...
 
IF COVID really is finally starting to recede as everyone hopes, it leaves physical gold investing very much larger than when it began, writes Adrian Ash at BullionVault.
 
Yes, gold investing just saw the weakest interest since before the Covid Crisis among European and US investors in July.
 
The number of new precious metal buyers coming to use the world's largest bullion marketplace online for the first time also dropped to pre-Covid lows last month.
 
But summertime is typically a soft period for new investment decisions, and mid-2021 is proving seasonally quiet for gold and other precious metals.
 
And compared to the eve of the pandemic, ownership of physical gold – securely stored, insured and ready for instant sale in your choice of London, New York, Singapore, Toronto or most popular Zurich – is now more than one-fifth larger by weight, two-fifths larger by value, and one-third more popular among private investors.
 
Chart of the Gold Investor Index, last 3 years. Source: BullionVault
 
The Gold Investor Index tracks the number of buyers versus sellers among BullionVault's 95,000 users worldwide, almost 9-in-10 of whom live in the UK, Eurozone or USA.
 
It fell sharply in July, more than reversing June's bounce to 57.6 to read 54.2 last month.
 
Down 5.6 points from the previous 12-month average, that was the lowest Gold Investor Index since January 2020, eve of the global Coronavirus pandemic, when it read 53.5.
 
The Gold Investor Index then jumped as the crisis took hold, hitting its highest in more than 8 years at 65.9 in March 2020. A reading of 50.0 would signal that the number of people buying gold across the month perfectly matched the number of sellers.
 
So while the number of people starting or adding to their holdings of gold – securely vaulted in each client's– fell 35.0% last month from June, it was still greater than the number of sellers, which slipped by 1.0%.
 
New interest in precious metals also fell sharply in July, with the number of first-time users of BullionVault – where investors wanting securely-stored and insured gold, silver and platinum they can buy bullion instantly by smartphone apps or online – dropping 34.3% month-on-month to the lowest since June 2019.
 
Chart of the Silver Investor Index, last 3 years. Source: BullionVault
 
The Silver Investor Index also fell in July, dropping from June's 3-month high of 56.2 to read 54.4 last month.
 
That was the weakest since May's reading of 53.1 marked the Silver Investor Index's lowest point since January 2020.
 
July's drop in private-investor silver buying came as the more industrially-useful precious metal fell 4.5% in price to its cheapest Dollar month-average in three at $25.75 per ounce.
 
Silver's Euro and British Pound prices also fell across the month, down 2.7% to €21.78 and 3.0% to £18.66 respectively.
 
Again, like gold, BullionVault users were net buyers by weight as well as in number, with a net addition to client holdings of 3.8 tonnes taking their total stockpile of silver to a 12th consecutive all-time high at 1,222 tonnes, now worth $1.0bn (£717m, €841m, ¥110bn).
 
Gold prices fell this July for a second month running in Dollar terms, slipping 1.5% to the cheapest monthly average since April at $1807 per ounce as the US currency rose on the FX market.
 
But the precious metal stabilized for Euro and Sterling investors, adding 0.4% to €1528 and 0.1% to £1308 respectively. 
 
And with global stock markets looking over-priced as inflation erodes the value of cash and fixed-income investments, gold continues to draw solid ongoing demand, albeit less dramatic than during the peak of the Covid crisis.
 
Gold investing demand was positive by weight yet again in July on BullionVault, equaling almost a quarter of a tonne (227kg) net of customer selling.
 
That grew the total quantity of gold now owned by BullionVault users to its 17th consecutive all-time record at 47.6 tonnes, now worth $2.8 billion (£2.0bn, €2.3bn, ¥306bn).
 
Compared to the end of January 2020, that's a rise of 22.1% by weight and 40.7% by Dollar value. Today 31.0% more people own gold than 18 months ago – one of this dreadful pandemic's happier legacies.
 
The question now for bullion markets and prices is how this surge in popularity develops as the post-pandemic world tries to recover amid supply-chain bottlenecks and continued record monetary stimulus, all while learning to live with the virus.

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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