US Savers Jump to Invest in Gold at $2000 Record
Tuesday, 5/02/2023 09:48
Number of first-time US gold investors +109%...
A SURGE in US demand to invest in gold has seen this spring's profit-taking among Western private investors ease back as Washington's debt-ceiling standoff adds to anxiety over America's banking sector,
writes Adrian Ash at BullionVault.
That's according to the latest
Gold Investor Index, a unique measure of sentiment built solely on customer
trading on the world-leading precious metals platform.
Gold in April set new record highs on its month-average price in US Dollars, Euros, Sterling, Yen and most other currencies, raising the cost to invest by 4.6% to an average of $2000.42 per Troy ounce at the physical market's London benchmarks (£1606.62 and €1822.54 per ounce, ¥8584 per gram).
While the number of people choosing to invest in gold or expand their existing holdings on BullionVault slipped 10.4% from March's 5-month high, the number of sellers dropped 41.6% from
March's all-time record. Together that drove the Gold Investor Index up to 53.9, rising by 2.0 points and marking only the 2nd time in 12 months that the index didn't move in the opposite direction to gold prices.
Setting a
decade high in March 2020's Covid Crisis at 65.9, the Gold Investor Index would read 50.0 if the number of buyers exactly matched the number of sellers across the month.
So after profit-taking jumped when gold rose through $1900 per ounce in early 2023, private individuals wanting to invest are now growing acclimatized to these higher prices, adding to their holdings at last month's new record-high average of $2000.
Again, the steepest growth in new precious metals investment worldwide matches the focus for political and financial stress, because appetite among US households is growing as the debt-ceiling standoff adds to anxiety over the banking sector.
That echoes
how Eurozone investors responded to Russia's invasion of Ukraine last spring and how
British investors then responded to the UK Government's disastrous mini-budget in September.
Worldwide, the number of people choosing to invest in precious metals for the first time fell 29.9% in April from March's 1-year high, but the monthly count rose 28.9% in the USA to the highest since April 2021, more than doubling from the prior 12-month average.
That jump of 109.3% contrasts with a slip of 3.3% in April for new Eurozone investors compared with the prior 12-month average and a rise of just 1.1% for the number of first-time UK investors.
Like private demand to invest in physical, vaulted gold bullion, both
gold ETF inflows and speculative gold trading in Comex derivatives remain muted compared to the precious metal's previous assaults on $2000. There's plenty of room for gold investing to rise, boosting prices further, while the underlying physical price continues to find strong support from
China's consumer demand and the
seemingly relentless bid from emerging-market central banks.
Despite the new record high in gold prices, investors using BullionVault last month grew their gold holdings by the most since December, adding 0.2% across the month and taking the total quantity securely stored and insured in each client's choice of London, New York, Singapore, Toronto and (most popular) Zurich to 47.7 tonnes.
More gold than most central banks keep in reserve, that total remains 0.4 tonnes below December's peak weight but it's worth a new all-time record above $3.0 billion (£2.4bn, €2.7bn, ¥416bn).
While gold added 4.6% to set new record-high prices in April, silver's month-average price leapt 14.0% – the fastest rise since August 2020 – to reach 13-month highs.
With BullionVault enabling private investors to trade silver at a fraction of the dealing costs charged by retail bar and coin outlets, that surge saw sellers outnumber buyers on for the 3rd month in six, and the profit-taking pushed the Silver Investor Index down to 47.9, just 0.4 points above December's record low and 4.5 points below March's rally when prices pulled back.
BullionVault users were also net sellers by weight, liquidating almost 20 tonnes of silver overall – the heaviest outflow since January 2022 – to cut the total quantity of silver securely stored and insured in each user's choice of London, Singapore, Toronto or (most popular) Zurich to the smallest in 3 months at 1,243 tonnes.
Despite the outflow of metal, the value of BullionVault users' silver holdings rose 2.0% to $985m (£794m, €901m, ¥135bn), the most since it breached $1.0bn amid
New Year 2021's #silversqueeze ramp on social media.
Bottom line? Volatility plus a strong uptrend is making precious metals very attractive to active investors wanting to exploit quick moves. For longer-term savers wanting to invest against inflation, bank failures and political risk, the certainty and security of physical ownership continue to shine.
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