Bullionvault's Gold Investor Index edges down from 4-month high, but only just...
WHAT DID the US Fed's taper-no-taper dance do to gold and other assets prices last month? asks Adrian Ash at BullionVault.
You can see that simply by glancing at the charts. But what did its shilly-shallying do to the central bank's long-term credibility?
Well, according to our Gold Investor Index here at Bullionvault – the world's largest provider of physical bullion ownership online – it took some of the heat out of investor sentiment towards gold. But not a lot.
The Gold Investor Index slipped from a 4-month high in September. Measuring the balance of customers who added to their gold holdings over those who reduced them, it edged down from 53.8 in August to 53.0 last month.
The Gold Investor Index peaked at 71.1 in September 2011. A reading of 50 would signal an equal number of net gold buyers and sellers.
Last month's reading compares with 52.2 in September 2012. So big picture, the balance of private investor sentiment was stronger even as "tapering" loomed than when this current program of quantitative easing was first begun 12 months before.
No, the Fed didn't reverse all of this September's investor caution on gold when it then lost its bottle and stuck with $85 billion of monthly money printing. And yes, price-wise September failed to deliver gold's typically strong start to autumn. But that gave new investors the chance to buy the dip. And the number of people choosing gold to insure a portion of their savings continues to grow.
Buying gold is always a political vote against central banks. Or rather, it's way of betting that central banks are mismanaging money. As the Gold Investor Index shows, the US Fed's flip-flopping over its QE policy continues to weaken the central bank's credibility with savers still further.