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New index shows private investors bullish on gold as price jumps

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Private investors grew increasingly bullish on gold in September, according to a new index released by online gold and silver exchange BullionVault.



Now caring for GBP1.1bn (USD1.7bn, EUR1.4bn) of physical gold for its customers, more than any other direct provider, BullionVault says its new Gold Investor Index rose last month to 52.5.
 
That was up from August’s reading of 52.1, but stayed below readings seen earlier this year. A reading of 50.0 would indicate an equal number of gold buyers and sellers amongst BullionVault users.
 
June’s reading at the end of the second-quarter was 54.8. Last September, the index hit its highest level in the series to date at 71.7.

More than 42,000 people in 159 countries have used BullionVault to buy, store and trade physical gold and silver since it was launched in April 2005. Almost 90 per cent of its users live in the UK, US or Eurozone.
 
Head of research Adrian Ash says: "The Gold Investor Index is a new and unique insight into private-investor sentiment towards physical gold. It shows whether more people are buying or selling gold, or choosing to sit tight.
 
"The Gold Investor Index measures sentiment using hard transaction-based data. It is driven by the revealed preferences of the world’s largest pool of private gold investors.
 
"Today’s reading says that the number of households buying gold continues to grow. It also suggests people are less concerned about either imminent inflation or a fresh peak in the financial crisis than the gold price alone might suggest."
 
Dollar gold prices rose to new seven-month highs during September, ending 7.7 per cent higher at a seven-month high of USD1766 per ounce. Gold priced in Euros hit a new record of EUR1377 per ounce, up 5.0 per cent for the month.
 
The gold price for UK investors – who account for just under half of BullionVault’s total user base – rose 5.6 per cent to GBP1099 per ounce, its highest level since February.
 
Marcus Grubb, managing director, investment at the World Gold Council, which is an investor in BullionVault, says: "The Gold Investor Index shows encouraging developments in September, particularly given these results include the announcement of QE3 by the US Federal Reserve, which has since helped drive the gold price to its current levels. Gold’s properties as a vehicle for capital preservation and a source of liquidity are increasingly sought out by investors, as they look to navigate stormy waters."

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