The gold price has fallen hard in 2013, but private investor appetite for precious metal as an asset remains undimmed so far, according to BullionVault, the trading and investment platform.

When the trading platform and investment firm Saxo Bank made one of its “outrageous predictions” a year ago, one of its supposedly far-out calls was stating that the price of gold would fall sharply to $1,200 per ounce. Some people may have scoffed, but the Denmark-headquartered bank had the last laugh. Gold has fallen by the biggest extent since 1981.

It hasn’t been a good year for gold bulls, although people who regard the yellow metal as a long-term safe-haven asset will have been pleased to get into the market below the record high levels ($1,920 per ounce) two years ago. That means gold buyers can get into the market at a less eye-watering price. At BullionVault.com, the online trading platform for precious metals, the view is that private investor appetite for gold remains undimmed.

“A survey of just under 250 BullionVault users in the last few weeks shows that sentiment amongst private investors remains upbeat on gold and silver,” Adrian Ash, head of research at the firm.

“These investors are not just maintaining their holdings: over the last 12 months more than half increased their allocations to precious metals using BullionVault, whilst one in three (34 per cent) kept their holdings the same,” he said.

An issue for the gold market, and to some degree other precious metals markets, is how to treat the prospect of an end to US Federal Reserve quantitative easing, or “tapering” of QE.

“Private gold and silver investors aren't ignoring the threat of QE tapering: 38 per cent of respondents believe that monetary policy will have the greatest effect on the gold price over the next 12 months. Despite this, BullionVault’s long-term investors (over half of respondents to the survey have been investing for longer than two years) clearly continue to see gold’s appeal, with 82 per cent of respondents of the belief that the price will rise or stay the same in 2014. Silver investors are more positive still, with more than one in three forecasting a rise of 30 per cent or more next year,” Ash continued.

“It’s been a tough year for precious metals. Losing more than 24 per cent so far this year, gold has suffered its worst year since 1981 (down 32 per cent) and has only just bettered 1975 so far (down 25 per cent in dollar terms),” Ash said.

“This has been mirrored on BullionVault’s online exchange: volume is down 21 per cent by value, with £676 million of gold and silver changing hands (12 months to end-Oct). The company's pre-tax profit (unaudited) has slipped 11 per cent to £2.8 million, but gold and silver tonnages owned by clients are both up (3.3 per cent to 32.4 tonnes and 29 per cent to 427 tonnes).

“Whatever the future holds for precious metals in 2014, it seems private investor sentiment is unabated for the time being,” Ash added.