...as 'stretched' equities head into 2020 at record highs...
PRIVATE GOLD INVESTING held firm in November, extending its strongest run for 7 years as precious-metal prices retreated further from this summer's multi-year highs,
writes Adrian Ash at BullionVault.
Having risen for
4 months in a row – something not seen since the end of 2012 – the Gold Investor Index was unchanged last month from October's level of 56.2, its highest reading since July 2018.
Built solely from trading decisions on BullionVault, the world's largest online marketplace for investment bullion, the index tracks the number of people starting or adding to their gold holdings across the month versus those choosing to sell the metal.
Peaking at 71.7 in September 2011, the Gold Investor Index fell this June to 49.1, its lowest reading in almost a decade and only the second time it signalled more sellers than buyers, slipping below 50 as prices jumped and profit-taking outweighed new buying almost 2-to-1.
Gold prices retreated in November at their fastest monthly pace since August 2018, dropping 1.7% to average $1470 per ounce, the cheapest since July this year.
That still put 2019's average gold price 17.8% higher for the year so far, the strongest rise since 2011.
Wall Street's S&P500 meantime set 11 fresh all-time record highs in 20 sessions last month, while the MSCI World Index of developed-market equities came within 0.4% of start-2018's all-time peak.
So despite easing back this autumn, gold has defied surging stock markets and a strong US Dollar in 2019 to record its best year in 8. Gold's investment appeal has shone this year as a hedge against plunging bond yields, negative interest rates, and a growing sense that equity valuations are too stretched to be sustainable.
Geopolitical risk also continues to see private investors add to their gold holdings as we approach New Year 2020. As a group, BullionVault users bought nearly two-fifths of a tonne net of client sales in November, swelling the quantity of gold held in each customer's choice of London, New York, Singapore, Toronto or (most popular) Zurich by 398 kilograms to almost 39.0 tonnes.
Larger than the bullion holdings needed to back all but 14 of the 114
gold-backed ETFs tracked by the mining-industry's World Gold Council, that was still one-quarter of a tonne smaller than November 2018's record of 39.2 tonnes, down by 238kg year-on-year after that heavy profit-taking on summer 2019's jump to all-time record gold prices for UK and Euro investors and 6-year highs in the Dollar.
Silver prices also fell for the second month running in November, down another 2.5% on a daily average to reach $17.18 per ounce after falling 3.0% in October.
That price drop saw the Silver Investor Index rise back to 54.9, a 2-year high when reached in August.
Silver demand was also strong by weight, with customers of BullionVault adding another 16.2 tonnes net of their selling and extending 12-month growth above 70 tonnes – the strongest annual pace since mid-2017 – to put client holdings at a new all-time record of 818 tonnes.
