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Adrian Ash

Gold investing sentiment hits two-year high as price holds steady amid Greek-Euro crisis

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Gold sentiment among private investors reached its highest peak for more than two years in June, according to the latest Gold Investor Index from BullionVault.

The Gold Investor Index measures sentiment towards gold using trading data from BullionVault, the world's largest gold and silver investment platform online.
 
Last month the number of gold buyers rose to the greatest in 18 months, while the number of existing investors who chose to sell fell 30 per cent from the previous 12-month average.
 
As a result, the Gold Investor Index rose to 54.6 in June, beating February's strong rebound from near 5-year lows to record the highest reading since the spike of April 2013. A reading above 50.0 signals more people growing their holdings than selling over the month.

Adrian Ash (pictured), head of research at BullionVault, says: "Last time gold investing sentiment was this strong, April 2013's near-10 per cent price crash saw demand jump across the retail gold market. It retreated just as quickly, however, once that bargain-hunting was exhausted.
 
"2015 in contrast has seen both sentiment and prices hold much steadier, consolidating as investors begin to query the high valuations put on equities and the record-low yields paid by government debt.
 
"Most notably, existing bullion owners have become much stickier, avoiding sales on both spikes and dips as the economic back-drop starts to make the case for holding rare, indestructible and instantly tradable gold very plain once again."
 
Looking at the Greek crisis, Ash adds: "This turnaround in investor sentiment isn't about Greece, because inflows to physical gold have been rising since the turn of this year. Private investors had already begun questioning the ability of policymakers to maintain confidence in the broader economy and monetary outlook.
 
"Gold prices have yet to react either way to the current Greek crisis, avoiding the sell-off hitting industrial commodities, but also failing to surge as gold did when Athens' debts first hit the headlines five years ago. That's because this crisis for now remains Greece's alone. Money managers have yet to take fright. It would be irrational if not greedy or ghoulish to expect gold's function as financial insurance to pay off in the absence of broader investment stress."
 
Investors added more than 1.4 tonnes of gold to their total holdings since New Year – three times as much as during the first six months of 2014. That took total client gold holdings to more than 34 tonnes.
 
Sentiment towards silver bullion remained highly volatile, but also jumped in June, BullionVault data show.

Rising from its second dip below 50.0 of the last year in May, the Silver Investor Index jumped at the fastest pace since March 2012 last month, hitting 56.7 as the number of private investors buying silver reached the highest level in 9 months, but the number of sellers fell to its lowest level in three years.

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