Gold Coins and Bars: Germany Sells, China and India Buy
Tuesday, 7/30/2024 14:06
Western gold investment sinks, Asia jumps on new data...
GOLD INVESTMENT trends have diverged between Asian and Western households on 2024's fresh record prices, new data says today, with Germany – the coin-and-small-bar industry's former darling – becoming a net seller overall in April to June while retail gold investing jumped in China and India.
That's according to figures compiled by specialist analysts Metals Focus and released Tuesday by the mining industry's World Gold Council.
The
No.1 gold consumer nation China saw net demand to buy bullion coins and retail investment bars jump by more than 3/5ths year-on-year in the second quarter, setting a series record for Q2 demand outside of 2013's price crash surge.
No.2 consumer India also saw a surge of
gold coin and small bullion-bar buying, with its net total rising by almost one-half from spring 2023.
On a rolling 4-quarter basis, that means Indian households – now enjoying a marked drop in prices after
the BJP-led Government slashed gold import duty last week – haven't chosen to buy this much gold in the form of bullion coins and small bars since the 12 months ending September 2014.
China's 4-quarter total meantime comes only 5 tonnes shy of its past decade's peak, with coin-and-bar demand reaching nearly 355 tonnes in the 12 months to June after Q2 saw mainland Chinese retail gold investing hit 80 tonnes. That was barely 6 tonnes behind China's gross demand for gold jewellery between April and June, the tightest gap since at least 2010 on the World Gold Council's
Gold Demand Trends data.
Separate figures from the China Gold Association say coin-and-small-bar demand outstripped jewellery purchases this spring, reaching 107 tonnes versus 86 and marking a flip from adornment to investment not seen before on modern data as the world's 2nd largest economy and 2nd most populous nation faces a real estate slump, a
bear-market in equities, and a sharp slowdown in GDP growth.
In contrast to Asia's 2 giant consumer markets, rich
Western economies all saw gold coin-and-small-bar demand drop in Q2 from the same period last year on today's World Gold Council figures, with households in two European markets choosing to sell and take profit overall on the precious metal's fresh all-time price highs.
Australia fell 19% by weight, Japan 26%, North America 48%, and Western Europe 65%, led by a 3rd consecutive calendar quarter of net selling in France and the first such liquidation by German households since at least 2010.
Between 2010 and 2022, Germany was the 3rd largest national consumer of gold coins and retail-investment bullion bars in all but 2 years, when it came second only to world No.1 China in 2020 and 2022.
But last year's new record gold price in Euros, plus the return of above-zero interest rates on cash in Eurozone banks, meant that
Germany's demand for retail gold investment products sank by 75%, falling to 5th place behind China, India, Turkey and the United States.
Germany then plunged again, down to 18th position across the first half of 2024 by showing less than 5 tonnes of net gold coin and small-bar demand, dropping behind smaller or economically poorer nations including Australia, Switzerland, Saudi Arabia, South Korea, Pakistan, Indonesia, Egypt, Thailand, Russia, Iran and Vietnam as well as gold's big four of the USA, Turkey, India and China.
April-to-June saw German residents sell 2.0 tonnes more gold in the form of bullion coins and bars than they bought as a group, and
the selling has continued into July according to retail dealers speaking to news-site GoldReporter.de
"Customers have taken advantage of the high prices to sell precious metals again," says one small bar and coin dealer.
"The renewed rise in gold prices is being used to take profit by many sellers who were too hesitant during gold's earlier rise," says another.
The split between Western and Eastern gold investing trends also shows in bullion-backed ETF trust fund flows, with China leading small net additions to Asian-listed gold ETFs for the fourth calendar quarter in a row in Q2 2024.
European and North American
gold ETFs in contrast have now seen investors sell more than they bought for 8 calendar quarter in succession.
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