Data published by BullionVault, which says it is the largest online marketplace for physical precious metals, suggests investors across Europe sought to increase their exposure to gold thorugh July, in response to concerns over global economic growth, deficit spending by governments and mindful of possible quantitative easy by central banks.
The month marked a turnaround from June, when net sellers on the platform hit a three year high, with such sellers falling by 30% in July, while the service provider saw a 21% increase in the number of customers starting or growing their holdings of gold. The number of first time buyers of gold measured by BullionVault globally increased by 39% on June.
Broken down by key markets, the service provider says that July saw the most ever first time German investors buy into the asset, while the number of first time eurozone investors rose by 55%. July was the strongest month for eurozone account openings since February 2016. New accounts in the UK incrased by some 27%. It also noted that in the UK market, gold priced in sterling hit a record high of £1,.213/oz by 5 August.
However, those with existing gold holdings chose to take advantage of the rising price. Holdings of physical gold actually shrank by some 149kg. This took the total sold by weight since the start of 2019 to 1.1 tonnes.
BullionVault's Gold Investor index rose to 52.6 in July, from 49.1 in June, further illustrating the shift from sellers to buyers. The index peaked in September 2011 at 71.7 when gold priced in dollars set its all-time high of $1,920/oz.
Adrian Ash, director of research at BullionVault, said: "It's been great to see private investors who bought lower down taking advantage of gold's 2019 jump to cash in and trim their holdings. Building a position by buying the dips may prove to be difficult however, because while gold has put in a stellar performance so far this summer, it's hard to see what might stop this bull run anytime soon."
"Central banks remain heavy gold buyers, interest rates are now falling, and any further weakness in the global economy could see the return of QE. Interest from new investors is meantime rising sharply as geopolitical and financial risks pile up with the new government deficit spending."