Investment Strategies

Global Demand For Gold Rises As Investors Snap Up Bargain Prices

Mark Shapland Reporter London 2 December 2014

Global Demand For Gold Rises As Investors Snap Up Bargain Prices

Weakening gold prices have drawn in private buyers, according to a precious metals trading and brokerage business.

Appetite for gold globally among private investors was up in November, according to BullionVault, which said its investor index rose to 52.1 from 51.9 level in October.

A reading of 50.0 would signal the number of net buyers equalled net sellers exactly. Recording a series peak of 71.1 in September 2011, the gold investor index hit a 4.5-year low at 51.2 this June. Gold's monthly average price in November for both US dollar and pound sterling investors was the lowest since April 2010 at $1,176 and £745 ($1,168) per ounce respectively

The movement was down to fresh price weakness which saw the heaviest trading since March, as well as a growing number of people buying gold to build "financial insurance" at lower cost.

In early-afternoon trading in London today, gold fetched around $1,200 per ounce.

"These new lows in the gold price are unsurprising given the collapse in oil prices and the new record highs in US equities. The exit of hot-money funds and traders who chased the bull market higher has created an opportunity for private investors to build a position in gold as portfolio insurance, and at lower cost," said Adrian Ash, head of research at BillionVault, the online gold and silver exchange.

"Our recent survey shows that private gold investors today are typically more measured in their allocation, using gold to balance a broader portfolio of other assets. Over a quarter of gold investors hold up to 10 per cent of their investable wealth in gold or gold-related assets," he added.


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