Research from BullionVault reveals that private investors across the Western world last month showed the weakest interest in buying gold since before the Covid Crisis began.
The number of new precious metal buyers using the world’s largest bullion marketplace online for the first time also dropped to pre-Covid lows in July, the firm reports.
Gold demand was positive by weight however, equalling 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 USD2.8 billion (GBP2.0 billion, EUR2.3 billion, JPY306 billion).
That’s a rise of 22.1 per cent by weight and 40.7 per cent by Dollar value from the end of January 2020. As of 1st August, 31.0 per cent more people owned gold at BullionVault than 18 months ago.
Adrian Ash, director of research, says: “Summertime is typically a soft period for new investment decisions, and mid-2021 is proving seasonally quiet for gold and other precious metals.
“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.
“If the pandemic really is finally receding as everyone hopes, it leaves physical gold ownership more than one-fifth larger by weight, two-fifths larger by value, and one-third more popular among private investors than when the crisis began.”
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 eight 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 choice of London, New York, Singapore, Toronto or most popular Zurich – fell 35.0 per cent last month from June, it was still greater than the number of sellers, which slipped by 1.0 per cent.
New interest in precious metals also fell sharply in July, with the number of first-time users of BullionVault – where investors can buy securely-stored and insured gold, silver and platinum instantly by smartphone apps or online – dropping 34.3 per cent month-on-month to the lowest since June 2019.
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 lowest Silver Investor Index since January 2020.
July’s drop in private-investor silver buying came as the more industrially-useful precious metal fell 4.5 per cent in price to its cheapest Dollar month-average in three at USD25.75 per ounce.
Silver’s Euro and British Pound prices also fell across the month, down 2.7 per cent to EUR21.78 and 3.0 per cent to GBP18.66 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 USD1.0 billion (GBP717 million, EUR841 million, JPY110 billion).
Gold prices fell this July for a second month running in Dollar terms, slipping 1.5 per cent to the cheapest monthly average since April at USD1807 per ounce as the US currency rose on the FX market.
But the precious metal stabilised for Euro and Sterling investors, adding 0.4 per cent to EUR1528 and 0.1 per cent to GBP1308 respectively.