Gold Investing Snaps 6 Quarters of Profit-Taking Amid Trump's 'Perfect Chaos'
Tuesday, 4/01/2025 13:06
President's volatile US policy drives gold to new record prices...
GOLD's latest run of fresh record prices has failed to dent 2025's rebound in private demand to invest in physical bullion,
writes Adrian Ash at world-leading precious metals marketplace BullionVault.
The price of 'safe haven' bullion rose 19.4% across the first 3 months of this year,
gold's strongest quarterly price increase since Q3 1986 in US Dollar terms. Gold also set 20 new all-time highs, the most in any quarter since summer 1979's record count of 22.
But rather than selling more gold than they chose to buy, private investors as a group snapped 6 calendar quarters of profit-taking in gold to grow their combined holdings on BullionVault, albeit by only 86 kilograms (0.2%) to 44.2 tonnes.
Coupled with the precious metal's latest price jump, that took the value of BullionVault clients' gold investments – all securely stored and insured in each user's choice of London, New York, Singapore, Toronto or most popular Zurich – to a new record of $4.4 billion (£3.4bn, €4.1bn, ¥663bn), higher from New Year's Eve by 19.5% (+15.9% in GBP, 15.1% in EUR, 14.0% in JPY).
Already the best-performing asset of the 21st Century to date, gold is surging as Trump 2.0 turns what was left of the US-led world order on its head. The
US President's tariff strategy and his increasingly volatile stance on Russia's war against Ukraine are proving the perfect chaos for new record gold prices, stronger even than the Covid catastrophe of five years ago.
The precious metal thrives on geopolitical uncertainty, economic stagflation and falling stock markets. Trump is delivering all three.
Like net demand by weight, the Gold Investor Index – a unique measure of sentiment which tracks the number of buyers against the number of people choosing to sell – also rose to its strongest quarterly reading since spring 2023, averaging 54.5 between January and March and rising 0.2 points from the final 3 months of last year.
Compared to Q1 last year, when
the Gold Investor Index set a record quarterly low of 50.5, the index has risen by 4.1 points, its sharpest four-quarter increase since the Covid Crisis of 2020.
Any reading on the Gold Investor Index above 50.0 signals more buyers than sellers using BullionVault. The index set a monthly low of 47.5 last March as gold crossed above $2100 per Troy ounce for the first time,
spurring record-heavy profit-taking among gold investors.
But with gold ending Monday almost $1000 higher, the Gold Investor Index read 54.6, exactly in line with its long-term average and down by 1.7 from February's leap to a 45-month high.
So while the pace of gold's gains is rightly making headlines,
the upturn in gold investment demand remains very measured to date. Gold's latest run of fresh record highs continues to attract new buyers. But rather than any kind of mania, gold is still recovering from last year's low demand and profit-taking. Its appeal, like the price, could yet have much further to run if Trump's policies tip the stock-market correction into a crash.
The number of new accounts opened to invest in physical precious metals on BullionVault last month slipped 4.0% from the near-4 year high seen in February. That still put it 40.5% above the prior 12-month average, led by strong growth in France, Italy, the UK and Germany.
Silver prices also rose sharply in Q1, increasing by 15.5% in US Dollar terms – the fastest quarterly gain since Q4 2022 – and setting new all-time highs for UK Pound and Euro investors on a quarterly-average basis.
But in contrast to gold, silver continued to meet net selling by private investors, with BullionVault users cutting their combined holdings by 13.8 tonnes since New Year (-1.2%) to the lowest by weight since December 2020 at 1,142 tonnes.
By value, BullionVault clients' silver holdings rose 14.2% across Q1 to a new month-end record of $1.2 billion (£967m, €1.1bn, ¥187bn). But the Silver Investor Index, again tracking the number of buyers against sellers, halved February's 2.2 point rise in March, dropping back to 50.8 and putting the quarterly reading at 50.8.
Down 1.8 points from the end of 2024, that was still 1.4 points above last New Year's record quarterly low for the Silver Investor Index, and it marks a positive balance of buyers over sellers. But only just.
Trump 2.0, in short, means so far that 'safe haven' beats industrially-useful. Because while gold is finding rising and strong new demand to buy, silver demand is much softer.
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