Gold trades at cheapest since 2010 after drop at
$1100, £700 and €1000...
GOLD TRADING by private investors jumped
in July as people reacted to the drop through key threshold prices, writes
Adrian Ash at BullionVault.
With the gold price trading down through $1100 and £700
per ounce – new 5-year lows – it also made new 2015 lows for Euro investors
beneath €1000 per ounce.
The number of private investors choosing to cut or quit
their holdings across the month rose 50% compared with June. But the number
of people starting or expanding their personal gold holdings rose for a third
month running – hitting the highest level since October 2013 on data from
BullionVault, the world's largest gold and silver investment platform online,
used to trade $1.2 billion of metals last year.
Overall, that put the Gold Investor Index – our
proprietary measure of sentiment, based solely on actual investor activity – at 54.5 in
July, just below June's 54.6 and holding the strongest reading since the
price crash of Spring 2013 unleashed a wave of new demand.
But so-called 'retail' gold investing rose sharply in
contrast, led by a spike in trading and new interest when prices broke below
what proved key thresholds mid-month.
On that Monday, 21 July, when the gold price spiked below $1100 for the first time in 5
years, BullionVault saw its heaviest 1-day trading volume since October 2014.
Web traffic to BullionVault that week proved the strongest since April 2013's price crash, just beating New Year 2015's
flood of interest on the 10% price rally.
New account openings also jumped that week, doubling the
previous 90-day average and taking July's full-month total 15% above the
previous year's monthly figure to its strongest level since January.
According to Google Trends, smaller bullion dealers and outlets likely
saw a similar pattern. Big moves in price – both up and down – prompt notable
jumps in gold-related search volumes, and worldwide searches for
"bullion" in English rose 34% in July from June, reaching the
highest level (outside December's annual gift-shopping searches) since April
2013.
Gold-related search volumes lagged that 2013 spike by 25%,
but July's price drop was much less dramatic. It still took gold to its
cheapest levels since early 2010 for US and UK investors however, and trading
by Euro investors also responded strongly as gold crossed a key threshold
point at €1000 per ounce.
BullionVault last month saw the strongest growth in new UK
investors since March. The number of new Eurozone investors rose 20% above
the recent 12-month average. Combined with the US Fed's repeated delays to
raising interest rates, July's 6% drop in Dollar gold and silver prices was
met by a 73% rise in the number of new US investors compared with June.
Indeed, new US customers last month accounted for the
largest proportion of all new BullionVault users since the start of 2011.
Sentiment towards silver bullion also remained strong in
July, but eased back more notably than gold's, falling to 55.3 from June's
26-month high of 56.7 on the Silver Investor Index.
While silver bullion found slightly fewer buyers last
month from June's two-year high, July's investors bought more by weight,
adding over 15.6 tonnes in total. The largest 1-month addition since last
October, that took BullionVault clients' silver holdings to a new record of
526 tonnes, greater by more than 14% from this time last year.
Private-investor appetite for gold and silver, in short,
remains undimmed by July's price-drop through key '00' thresholds. On the
contrary, new trading spiked – but only to continue a broader return to
physical bullion now holding steady since the start of 2015.
By weight, BullionVault users in July added to their
aggregate holdings for the sixth month running – the longest such run since
the first half of 2012. Client gold vaulted and reconciled in public and
recoin the user's choice of London, New York, Singapore, Toronto and Zurich
grew to more than 34.2 tonnes, breaking above 1.1 million ounces for the
first time.
Prices down, demand up? Long-term gold and silver
investors are positive on these 5-year bargains.
