BullionVault’s Gold Buyer Index Rebounds as Holdings at Record

Aug 05, 2014 4:00 am ET

Aug. 5 (Bloomberg) -- Gold investor demand showed signs of rebounding in July with holdings held by BullionVault customers rising to a record.

The Gold Investor Index, a gauge of investor demand, rose to 51.9 from a four-year low of 51.2 in June and the first increase since February, according to BullionVault, an online service for investors to buy and sell gold and silver which started the index in October 2012. A reading above 50 indicates more buyers than sellers. Gold held by its customers climbed to 33.03 metric tons from 32.8 tons.

Gold dropped 3.4 percent last month after rallying 10 percent in the first half of the year, a gain that outpaced broader measures of commodities, equities and Treasuries. While buying was fueled by tensions in Ukraine and the Middle East, U.S. growth reduced bullion’s appeal as an alternative asset.

“Various geopolitical blowups are starting to affect how some of the larger accounts see gold,” Adrian Ash, head of research at BullionVault, said by phone today. “Those who are buying are buying in size.”

Customer gold holdings exceeded the previous peak of 32.9 tons in March 2013, according to the company. Silver holdings were “flat” for a second month after climbing to a record 462 tons in May.

Zurich is the most popular spot to hold the gold, at 24.3 tons, with London at 6.7 tons, Singapore at 1.03 tons, New York at 0.7 ton and Toronto at 0.3 ton, Ash said.