Surging Gold and Silver Prices Outrun Record Profit-Taking
Tuesday, 1/07/2025 12:43
Investment demand net negative for 2nd year...
WESTERN INVESTORS sold a record quantity of gold and silver using BullionVault in 2024,
writes Adrian Ash at the world-leading precious metals marketplace.
Yet the bullion they own still jumped by nearly one-fifth in US Dollar terms as silver prices hit 12-year highs and gold made its strongest run of new all-time records since 1979.
BullionVault users last year cut their gold investing 6.0% by weight and silver by 4.7%. But surging prices meant that clients of the West London fintech ended 2024 holding 19.0% more value in gold at $3.7 billion...
...up 20.7% in UK Pounds to £2.9bn, 26.4% in Euros to €3.5bn, 31.9% in Japanese Yen to ¥440bn...
...while their securely-stored silver bullion rose 18.0% by value to reach $1.1bn on New Year's Day (up 19.3% in GBP to £869m, 25.0% in EUR to €1.0bn, 30.8% in JPY to ¥172bn).
Record gold prices, in short, spurred record profit-taking in 2024. But private investing in gold or silver didn't shrink as fast as prices rose, even though rising stock markets and the highest real rate of interest on cash savings since before the global financial crisis also encouraged people to bank some of their gains and rebalance their investments.
That shows solid commitment to precious metals as 2025 begins. And surveyed in December, users of BullionVault – nine in 10 of whom live in Western Europe or North America –
forecast that gold will now rise 17.6% this year to end at $3070 per Troy ounce, with silver rising 27.6% to $36.90.
The number of people choosing to sell gold fell in December, dropping 28.2% from November's figure to a 6-month low as gold prices fell by 1.5% against the rising US Dollar (-0.3% in GBP, -0.2% in EUR, +3.0% in JPY). But the number of people starting or adding to their personal gold holdings also dropped, down by 20.8% to the fewest in 3 months.
Together, that edged the
Gold Investor Index – a unique measure of private investor activity in physical bullion – down by 0.8 points from November's 17-month high to finish 2024 at 54.3, up 2.9 points from a year earlier.
The index set a decade peak at 65.9 as the Covid pandemic went global in March 2020, and it set a series low at 47.5 in March last year, signalling more sellers than buyers with a reading below 50.
Across the past 12 months on average, the Gold Investor Index slipped 0.4 points to 52.6, its lowest annual level since the reading of 52.2 in 2014, when gold prices were mired in a deep bear market.
Indeed, 2024 was a bull market in price only for Western investing. Gold demand stayed negative for the second year running as profit-taking ran ahead of new buying, because – for Western investors at least – conflict was confined to the ballot box and equity markets rose to new all-time highs.
But that calm now looks fragile as 2025 begins, and Trump's victory in the US election has driven a surge in first-time buyers, particularly across Europe.
The number of first-time BullionVault users worldwide rose 42.4% last year to the most since 2021, almost half of them opening their account in the last 4 months. Of those, more than 60% live in the UK, Germany or France.
The Silver Investor Index also fell in December, dropping 1.3 points from November's 21-month high to read 52.7.
That put the index's 2024 average at 50.8, matching the prior year's series low.
By weight, investors were net buyers of silver for the second month running, adding 1.9 tonnes and taking BullionVault client holdings 0.2% higher to the most since September at 1,156 tonnes. But the retreat in silver prices meant that gave the lowest value since July at $1.1bn, down 11.5% from October's record (-8.9% in GBP from £954m, -8.0% in EUR from more than €1.1bn, -9.0% in JPY from ¥189bn).
Gold meanwhile returned to net selling after November's steep price drop
snapped a 14-month run of profit-taking, but with BullionVault users selling only 45 kilograms more gold than they bought as a group.
That took client gold holdings down 0.1% to to 44.1 tonnes, more than most central banks hold and larger than all but 13 exchange-traded gold ETF trust funds, but the lowest weight since July 2020 and 4.5% below end-October's record value of $3.9bn (-1.9% in GBP from £3.0bn, -0.4% in EUR from above €3.5bn, -1.8% in JPY from ¥592bn).
Gold in 2024 made 38 new daily highs in US Dollar terms, matching 2011 – peak of the global financial crisis – with the most fresh records since the inflation-and-geopolitics price surge of 1979.
For UK, Euro and Japanese Yen investors, gold hit a record number of new records last year, setting 40, 44 and 45 fresh all-time highs respectively.
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