Private investors, who seized on July’s drop in prices to buy gold, continue to take gold profits, selling for quick gains in August, according to new data from BullionVault.
As gold-backed ETF trust funds swelled and speculative betting on Comex derivatives leapt, users of the world’s largest physical gold exchange online sold almost one-third of a tonne (328kg) as prices jumped amid growing global tensions over North Korea’s missile tests. The move nearly reversed the net inflows of a month before (361kg), when BullionVault users as a group grew their aggregate holdings to a new all-time record above 38.1 tonnes.
July’s price drop had seen the fewest number of sellers on BullionVault since December 2015, which marked the lowest Dollar gold prices in almost 6 years. But, with US Dollar prices rising to 11-month highs in August, the number of net gold buyers slid 13.2 pct across the month – while the number of gold sellers jumped 92.6 pct.
Together that pushed the Gold Investor Index – a measure of private investor action in physical bullion – down to 51.6 from a level of 55.1 in July; the index would read 50.0 if the number of net buyers and sellers across the month were equal.
Adrian Ash, director of research at BullionVault, says:
“Contrary to some headlines, Trump’s North Korean missile crisis has yet to spur any surge in private-investor demand for physical gold. Quite the reverse, in fact. Private individuals choosing to own physical gold at low cost in specialist vaults have been net sellers as a group, taking advantage of these speculative-led price gains to book profits.
“However, the underlying trend remains one of growing interest in gold. The number of private investors using BullionVault continues to set new records. Last month’s small gold sales came from July’s fresh all-time record high holdings.
“Gold rarely offers safety from geopolitics, never mind war. But its appeal as insurance against losses on other investments continues to grow as the threat of financial fall-out worsens from today’s global debt bubble.”
BullionVault First Time Users
Launched in 2005 and enabling private individuals to trade professional-grade bullion at a maximum 0.5 pct fee, BullionVault has now been used by more than 68,000 people in 183 countries worldwide.
Rising 18.3 pct from July, the number of first-time users last month reached its highest level since January, but was 8.2 pct down from August last year and 36.1 pct below the 3-year record of June 2016 – when the UK’s shock Brexit referendum spurred a surge in new interest amid sharp drops in world stock markets.
Silver on BullionVault meantime found the fewest buyers across August since October 2015, down 30.8 pct from July and 35.0 pct smaller from the 12-month average. The number of sellers jumped 72.1 pct to the largest number since April, led by US and UK investors – for whom the month average silver price rose 4.7 pct and 5.0 pct respectively from July.
Together this has pushed the Silver Investor Index down from 55.5 in July to just 50.4 in August, with the number of net sellers very nearly equal to the number of net buyers.
By weight, however, BullionVault users as a group added silver overall for the fourth month running, buying a net 2.5 tonnes and taking total holdings 0.4 pct higher to a fresh record of more than 689 tonnes.
The BullionVault Gold and Silver Investor Indices use proprietary data from BullionVault, providing a 24-hour precious metals exchange online; for each metal the series show the balance of net buyers over net sellers across the month as a proportion of all owners at the start, rebased to 50.
BullionVault.com is the world’s largest physical gold and silver online market, the company says, and offers private investors access to and storage of investment-grade bullion. Launched in 2005, it has operated across 183 countries.
BullionVault users – 89 pct of whom live in North America or Western Europe – today own $1.6 bln worth of gold bullion between them (£1.2 bln, €1.3 bln, ¥175 bln), which is more than that held by most of the world’s central banks. It also holds $384 mln (£298 mln, €324m, ¥42 bln) in physical silver and $7 mln (£5 mln, €6mln, ¥810 mln) of physical platinum, added to BullionVault’s online order board in March 2017, in partnership with the mining-backed World Platinum Investment Council.
In 2008 BullionVault became a full member of the professional trade body, the London Bullion Market Association (LBMA).