BullionVault, an online service for retail investors to buy and sell physical gold and silver, said its Gold Investor Index rose to a seven-month high in September as prices dropped beneath $1200 per ounce and towards last year’s lows.
It saw the number of private investors buying physical gold during September rise by more than one-third from August. The number of sellers, in contrast, was unchanged. That took the Gold Investor Index – which measures the balance of net buyers over sellers as a proportion of all gold-owning clients – up from 51.7 to 53.4, the highest level since February.
A reading of 50.0 would indicate equal numbers of people growing and choosing to reduce their gold holdings on BullionVault. The index peaked in September 2011 at 71.7, and hit a four-and-a-half year low at 51.2 this June.
Head of research Adrian Ash said: “After a quiet summer, last month delivered the sharpest price drop since last year’s crash found its floor in June. That brought a jump in bargain-hunting by private investors, marking a stark contrast to what money managers are doing with gold.
“Whether from Asian jewellery buyers or self-directed Western investors, it must be said that a gold market led by bargain-hunting alone cannot run sharply higher. But the number of people choosing to hedge against financial risk with gold’s lower-cost insurance continues to grow.”
Gold priced in dollars ended September 5.8% lower at $1216 per ounce, the sharpest month-end drop since June 2013, when dollar prices fell 14.5%. Spot gold has since fallen below $1200 – the lowest level since 2013′s crash low of $1180, touched at end-June and then again in late December.
Prices have fallen less quickly for euro and sterling investors as those currencies also dropped against the dollar, ending September at 3-months of £750 and €964 per ounce – down 3.7% and 1.7% respectively from the last day of August.
The company’s customers own about $1.3bn of gold, with the precious metal held in vaults in London, Singapore, New York, Toronto and Zurich. According to the report, customers added 0.3% more gold last month to new record holdings of 33.2 tonnes. Customers also added 0.3% more silver to a new record of 468.5 tonnes as its dollar price fell over 12%, taking it to new four-and-half-year lows, since surpassed, at $16.75 per ounce.
Approximately 50% of its 53,000 user base are in the UK, with 20% in the US, and the the balance spread across France, Germany and Italy.
At the time of publishing the spot price for gold was $1206.08 (£750.98) and for silver $17.32 (£10.77).
Demand for Physical Gold & Equity Release
What Is Equity Release?
Equity release is the use of financial arrangements that provide the owner of a house, or other property, with funds derived from the value of the property while enabling them to continue using it.
How Does Equity Release Work?
Equity release is aimed at homeowners aged 55 and over. It allows you to take some of the value of your home as cash.
How Buy-and-sell a home with Equity Release works
If your equity release provider is happy with the property you would like to buy, it will simply transfer the policy to the new property. This is known as ‘porting’. Exactly how this works will depend on the type of plan you have.
For the most common type of equity release – a lifetime mortgage – this will be a case of transferring the debt from one property to another. The only potential catch is if the new property is not worth as much as your current one – in these cases, if the loan now breaches the lender’s borrowing limits, it may request that you repay a portion of the loan early from the sale proceeds.