Investing in gold: a surge due to repeated crises. | Gold

As prices fall…

The Gold Investor Index maintained its 11-month gain.

The downward trend in gold prices since spring 2021 has driven bullion investment up in May, reaching the best level in nearly 12 months.

This is exactly what the BullionVault Gold Investor Index, our preferred measurement tool for analyzing the user behavior of our online platform and platform for investing in gold and silver using smartphones, says.

Depending on the number of buyers and sellers, the index should give 50.0 if the balance between them was perfect. Last month, it rose 2.0 points to 56.2, the strongest since June 2021. It is above the annual average for the first time since November 2020 after attempting to take profits.

graph of the gold investor index and average monthly gold prices in €

Gold Investor Index and Gold Prices in Euros, BullionVault

May’s rise in the Gold Investors Index shows us that gold prices in US dollars suffered their biggest decline in 14 months, falling 4.4% to their lowest monthly average since January at $1,839 an ounce.

Gold prices are currently capped up and down by inflation and interest rates, creating what commentators say will be a trading gap over the next few weeks or even months.

A currency devaluation, the worst seen in forty years, is restoring gold’s reputation as a safe haven. However, the lack of profits and difficulty in receiving dividends are countered by the increase in the interest rate of the Central Bank, which starts from zero, and inflation has risen to 8% or more per year.

As with the rise in the cost of living, financial markets have grown accustomed to the terrible war in Ukraine. This series of crises has weakened confidence in the stock markets and the economy, encouraging investors to buy gold when prices fall.

The number of private investors choosing to buy BullionVault gold, which is stored and insured in our vaults in London, New York, Singapore, Toronto or Zurich, has increased by 16.2% since April. This cut the decline in April in half from the 9-month peak seen in March. In comparison, the number of gold sellers fell 23.8% to its lowest level since December.

Demand for gold investment has also been strong, with BullionVault acquisitions accounting for almost a quarter of a tonne of our clients’ sales.

All this led to a further increase in the number of individuals owning gold, by half a percentage point for the second month in a row. This is more than 100,000 people (storing and protecting their precious yellow metal in our dedicated fintech vaults in West London) holding up to 47.7t of gold worth €2.6bn ($2.8bn).

Investment in silver

On a monthly average, the price of silver in US dollars fell by 10.7% in May. This downward trend since March 2020 highlights the impact of the global crisis on energy and manufactured goods.

Taking into account that the average price of silver during the month was at its lowest level since July 2020 at $21.90 per ounce, it turns out that the number of buyers of this metal since April increased by 18.6%, while the number of sellers decreased to 24.3%. reached the level of December last year.

In fact, the Silver Investor Index rose 2.4 points, repeating its April rise to 56.0, its highest reading in 11 months.

Graph of the Silver Investor Index vs. Average Silver Prices

Silver Investor Index and Silver Price, BullionVaultl

As a result, our customers’ purchases are 15 tons higher than their sales, bringing our customers’ inventory of the industry’s most valuable precious metal in BullionVault to its highest level in five months at 1,235 tons worth €808 million ($864 million). This follows the profit taking triggered by the price spike at the start of the year and into the spring.