Gold bullion found the fewest buyers in more than 4 years in September, with investors as a group cutting their holdings for the first time since March as interest rates on cash continued to rise and strong prices in Euro and UK terms spurred sales.
That’s according to the latest Gold Investor Index data from BullionVault, the largest marketplace for private investors to buy and trade physical precious metals, now caring for £3.2 billion of securely vaulted and insured gold, silver, platinum and palladium for over 100,000 users from 175 countries.
The Gold Investor Index tracks the number of buyers against the number of sellers each month. It fell 2.0 points in September to 52.2, the weakest reading in 6 months but rallying last week from an interim reading of 50.7 as gold prices dropped sharply. Even so, the number of people choosing to buy gold fell by 20.2% from the month before, hitting its lowest count since June 2019, while the number of sellers rose by the same proportion.
The Gold Investor Index set a decade high of 65.9 in March 2020 as the Covid pandemic and lockdowns crashed the global economy. A reading below 50.0 would signal more gold sellers than buyers among BullionVault users.
Commenting on today’s data, BullionVault director of research Adrian Ash says:
“While gold has retreated from the record highs reached on this spring’s mini-crisis in US banking, and while prices have fallen hard over the past week, September marked gold’s ninth highest monthly average ever in US Dollar terms, the fifth in UK Pounds, and the third highest for Euro investors.
“The underlying strength in gold prices, plus rising interest rates on bonds and cash, continues to invite profit-taking among existing holders at the same as deterring new demand. This is likely to remain the picture until interest rates turn lower or something breaks in the wider financial markets, spurring a rush for gold as investment insurance once again.”
By weight, last month’s selling on BullionVault saw investors as a group record their first net outflow of gold since March, trimming 265 kilograms (0.6%) from August’s month-end record holdings – the 3rd all-time high in a row – to reach 47.9 tonnes, the lowest since April.
Private investors also sold more silver in September than they bought as a group, cutting their holdings at BullionVault by 4.2 tonnes (0.3%) to 1,240 tonnes, the smallest in 15 months and 2.1% below last October’s record peak.
The Silver Investor Index held above 50.0 mark for the second month running, edging 0.5 points higher to 50.7 as the number of buyers fell 10.5% towards July’s 4.5-year low but the number of sellers also dropped, down 22.9% to the fewest since February, as the more industrially useful precious metal edged higher for UK and Euro investors but failed to spike to multi-month highs as gold did.
