Alt Investments
Surge Of New Buyers Not Enough To Outweigh Gold Sellers In January - BullionVault
An index of gold prices held steady as a rock in January as demand for the yellow metal could not quite outbalance desire by some holders to dump gold after the post-2013 slide.
Fresh demand for gold in January this year, which surged at its quickest pace since April 2013, wasn’t enough to outweigh the effect of owners selling the yellow metal to book profits or cut their losses after the recent price decline, figures show.
Internet-based precious metals trading and investment platform BullionVault said that as gold prices have fallen 40 per cent from their peak in the summer of 2011 (above $1,910), this has led some owners of gold to capitulate and sell.
Yesterday, the price of spot gold was around $1,264 per ounce.
The balance of buyers and sellers kept the firm’s in-house Gold Investor Index, which is based on BullionVault trading data, absolutely flat from December at 50.5 in January. (A reading of 50.0 would indicate a perfect balance of people starting or growing their gold holdings against those cutting or quitting.)
The Gold Investor Index peaked at 71.7 in September 2011, and hit a series low of 48.8 in February 2010, the firm said in a statement.
Recent macroeconomic shocks, such as the fall in the oil price and the surprise decision by the Swiss National Bank to stop capping the Swiss franc, have ensured the safe-haven charms of gold endure.
"2015 began with a bang for gold prices. Last month saw the strongest growth in new BullionVault users since April 2013's price crash unleashed a flood of bargain-hunting demand,” Adrian Ash, head of research at BullionVault, said.
“The number of people transferring money for the first time to buy metal on BullionVault last month was 65 per cent above the 2014 average. Amongst these new users, the number of larger cash transfers worth £100,000 ($150,961) or more rose 20 per cent from last year's monthly average,” he said.
“Overall however, the weight of client gold holdings shrank for the third month running, ending January 0.4 tonnes (1.3 per cent) below October's record high of 33.2 tonnes, as the number of people reducing or exiting their gold holdings jumped 64 per cent from December to the highest level since April 2013,” he said.
