New Gold Investing Grows, Profit-Taking Slows

Fresh multi-year highs in the gold price...

MORE private investors bought gold than sold it in July according to new data from BullionVault, reversing the previous month's net negative behaviour despite bullion prices rising yet again to fresh multi-year highs. On 5th August we hit a new record high in Sterling when the price reached £1213, with investor demand continuing to soar.

The largest online marketplace for physical precious metals, BullionVault saw the number of people starting or growing their personal holding of gold increase by 21% from June.

The number of net sellers across July meantime fell by 30% from June's 3-year high.

Together that saw the Gold Investor Index – a unique measure of private investor action in physical bullion – rise to 52.6 from June's reading of 49.1, the lowest in almost a decade.

The index would read 50.0 if the number of buyers and of sellers perfectly matched across the month. It hit a series peak of 71.7 in September 2011, when gold priced in Dollars set its current all-time record high of $1920.
 

Adrian Ash, director of research at BullionVault.com, said:

"It's been great to see private investors who bought lower down taking advantage of gold's 2019 jump to cash in and trim their holdings. Building a position by buying the dips may prove to be difficult however, because while gold has put in a stellar performance so far this summer, it's hard to see what might stop this bull run anytime soon.

"Central banks remain heavy gold buyers, interest rates are now falling, and any further weakness in the global economy could see the return of QE. Interest from new investors is meantime rising sharply as geopolitical and financial risks pile up with the new government deficit spending."

Worldwide, the number of people using BullionVault for the first time in July increased by 39% compared to June, extending the recovery from May's 11-year low. July 2019’s increase was led by the most first-time German investors ever acquired by BullionVault in one month.

The monthly count of first-time Eurozone investors shot up by 55% as gold priced in the single currency ended the month at €1281 per ounce. July was the strongest month for new Eurozone account openings since February 2016 when gold prices moved 11% that month.

UK new interest meantime rose by 27% as gold priced in Sterling set a new all-time record monthly average of £1133 per ounce, beating its previous high of September 2011, when a downgrade to the USA's national credit ratings coincided with a worsening of the Eurozone debt crisis and the aftermath of the worst rioting across England in modern times. The spot gold price in Sterling hit an 8-year high in July when it peaked at £1178.

 

Silver prices also rose in July by 8% in US Dollars to reach 13-month highs of $16.53 per ounce.

On BullionVault the number of people buying silver across the month rose by 19% from June, while the number of sellers jumped by 42%.

That took the Silver Investor Index from 52.0 to 51.4 in July.

Net of client selling, BullionVault users bought an additional 8.7 tonnes in July, taking holdings of the cheaper precious metal 1.1% higher to a new record of 767.6 tonnes.

While the Gold Investor Index rose, gold holdings by weight shrank 149kg on further net selling, falling 0.4% to end below 38 tonnes for the first time since October 2017 at 37.9 tonnes.

That was dramatically slower than June's net selling of 775kg. But so far in 2019, and with gold prices rising by 11% since New Year's Eve in US Dollar terms, BullionVault users as a group have now sold 1.1 tonnes – the heaviest 7-month liquidation since the world-leading fintech platform opened in 2005.