Global Gold Market Hits New Record Prices as Investor Demand Rebounds

• BullionVault sees strongest gold demand since Q1 2023
• Demand up 55.2% from Q1, with 3-in-5 UK buyers aged under-50
• Over 50s lead the charge in taking profits, with total selling  up76% year-on-year

While gold coin dealers and mints are suffering a nasty recession in the face of heavy customer selling and a lack of new buyers, gold’s new record-high prices are finding strong trading activity among private investors wanting to maximize their potential profits by trading the precious metal simply, quickly and at low cost.

Strong demand saw investor buying on BullionVault reach 2.6 tonnes in April-to-June, up 0.3% year-on-year, worth £153 million, and jumping 55.2% from Q1 2024. At the same time, profit-taking saw selling total 2.9 tonnes, up 75.5% year-on-year and worth £175m but rising only 8.7% quarter-on-quarter.

Together, that meant a net outflow of 0.3 tonnes overall, equal to 0.8% of BullionVault client holdings and contrasting with a 0.5 tonne net inflow in Q2 2023. But despite gold’s fresh record prices this spring, the pace of net selling slowed by 74.1% from Q1 2024’s record outflow of 1.4 tonnes.

Adrian Ash, Director of Research at BullionVault – which finds 9-in-10 of its global client base in Western Europe and North America and which ended June caring for a record £2.7 billion of physical gold for over 100,000 users, all stored and insured in each client’s choice of London, New York, Singapore, Toronto or Zurich – says that this slower net selling in the face of new record prices suggests investors are holding onto their long-term gold allocations, anticipating higher future profits.

“Because gold pays no dividend or income, an investor needs to sell at least some of their holdings when prices rise to realise a gain from the precious metal. Among UK investors, the over-50s in particular are taking profits as part of their wider investment activity, banking a year-on-year gain of 17% at new record highs across the second quarter of 2024.

“The jump in gold selling relative to buying slowed down from April to June, even as the precious metal set new record prices. This is likely because the ‘easy gold’ has already been sold, with investors taking profit on some of their bullion earlier in this bull market. Now they’re holding tight to their longer-term allocation as a form of insurance for their wider portfolio.

“Additionally, the strong upward trend in gold prices is starting to deter short-term profit-taking, because selling gold now could mean missing out on potentially higher future profits. Gold’s uptrend is also starting to attract new investment demand, backed by the worsening geopolitical picture and growing risks to the decade-long bull run in equities.”

“Before you buy gold, it’s vital as part of your investment strategy to consider the process and potential obstacles to selling which you might face. How you buy will decide how easily you sell, and some routes will make taking a profit much simpler and cost efficient when the market offers you the kind of return you are seeking.

“This is what makes securely vaulted bullion different from buying coins or small bars to keep at home, for instance. Already insured inside specialist storage, trading vaulted bullion online or via a smartphone app can make buying, storing and selling gold simple, instant and low cost. Keep gold coins for sentimental or collectible reasons. If it’s the value of gold as an investment you are after, vaulted bullion is a much better way of accessing the market.”