The old year ended with a bang for gold investing, as demand hit a 13-month high at online and mobile platform, BullionVault, it told What Investment.

January 3, 2018

London (Jan 3)  BullionVault users added almost two-thirds of a tonne to their total holdings in December, the heaviest net demand since November 2016 saw Donald Trump win the US election.

The number of private investors using to start or add to their gold holdings rose 11.4 per cent from the month before. Reaching a 3-month high, that was some 7.8 per cnet larger than the previous 2017 monthly average. The number of gold sellers in contrast fell 12.5 per cent, dropping 21.3 per cent from Jan-to-Nov 2017’s monthly average.

Together that pushed the Gold Investor Index up from 53.9 in November to 55.3, matching May’s peak as the highest level of 2017. A reading above 50.0 indicates more buyers than sellers. This unique measure of private investor sentiment towards gold bullion peaked at 71.7 in September 2011, and set half-decade lows at 50.5 around New Year 2015.

Adrian Ash, director of research at BullionVault, said, “Last year’s stock market boom saw private investors act more tactically in gold, taking profit and buying the dips. December’s surge of gold investing still left 2017’s net demand totalling just half the addition of 2016, when the Brexit and Trump-election shocks spurred a wave of new investing.

“For 2018 the key as ever will be what happens to other asset classes: Investor demand for gold is likely to remain muted if the stock market’s bull run continues. The best time to buy insurance however is before you need it.”

December saw global stock markets close out their 5th annual rise in succession on the MSCI World Index, while crypto-currency Bitcoin sank more than one-third after setting fresh record highs, more than 12 times its price at the start of last year.

The gold price meantime fell 1.6 per cent on its daily average to set a 5-month low in Dollar terms. The Gold Investor Index moved in the opposition direction for the 11th time in 2017, a run of inverse reaction by private investors unprecedented on BullionVault’s data series, starting in October 2009.

 Net of client selling in December, users of BullionVault bought 659 kilograms of gold last month. That took their total holdings – vaulted in each client’s choice of London, New York, Singapore, Toronto or Zurich – to a new record of 38.7 tonnes. Full-year 2017 demand totalled almost 1.5 tonnes, down 45.5 per cent from 2016’s four-year record addition of 2.7 tonnes.December also saw the strongest month of 2017 for silver demand, with BullionVault users buying 10.9 tonnes net of client sales, the heaviest addition since Nov 2016. That took 2017’s total silver inflows to 53.8 tonnes, again nearly half the addition of 2016 (99.6 tonnes).

The number of silver buyers jumped 27.2% last month from November, reaching the largest total since July. The number of silver sellers in contrast fell 28.4% to its lowest level since July. Together that pushed the Silver Investor Index up from 51.0 to 53.9, the highest reading since July.

Despite the festive season, December also saw a sharp upturn in the number of first-time users on BullionVault, up 14.8% from November to the fifth largest influx of new precious-metal investors of 2017.


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