The ongoing surge in gold prices has led to a significant increase in new investors in precious metals, doubling in numbers as the 2024 U.S. presidential election approaches. This data comes from BullionVault, a leading precious metals marketplace. However, the trend in the United States shows a different picture, with new buying activity declining in October compared to the previous month.
European Investors Drive Demand
Adrian Ash, director of research at BullionVault, noted that the U.S. election seems to have a greater impact on European investors than on American ones. “If the U.S. election is affecting safe-haven demand for bullion, it’s spooking private investors in Europe much more right now,” he stated. Ash emphasized that the lack of interest in gold among U.S. investors may reflect deep political polarization, as voters feel strongly confident in their candidate’s chances.
In October, gold priced in British pounds reached its fifth consecutive record high, rising 8.0% to £2,122 per Troy ounce. It hit a peak of £2,153 last Wednesday, marking the 40th new daily high in 2024 alone. This surge aligns with the record number of highs for gold in a single month, with 14 occurring in October.
Global Trends in Gold Investment
Globally, the number of new investors in precious metals saw a dramatic increase of 104.2% from the previous year, with a notable 49.9% rise from September’s figures. This surge marked the highest number of first-time users on BullionVault since March 2022, coinciding with the onset of the Ukraine conflict.
In the UK, first-time investors jumped 41.6% from September and 116.2% from the previous year, driven by economic uncertainties tied to the Labour Budget presented by Rachel Reeves. In contrast, U.S. first-time investors, despite being 54.8% higher than the previous year, experienced a 17.2% drop from September, reaching 36.8% below the peak seen in May.
Increased Activity in Gold Holdings
Last month, the number of individuals starting or adding to their gold holdings on BullionVault rose 37.5% from September, reaching the highest levels since June 2023. Conversely, the number of investors selling gold also increased, marking the most sales since April.
The Gold Investor Index, which measures sentiment among private investors in precious metals, rose 1.6 points from September’s five-month low to 53.6, the highest level since June. This index had previously reached a decade-high of 65.9 in March 2020 during the COVID crisis, but fell to an all-time low of 47.5 this March before the current price surge began.
A Cautious Outlook for Gold Investments
While new interest in gold is rising, overall gold investments in terms of weight saw net selling in October. BullionVault reported a 0.6% decrease in client holdings, reaching a 51-month low of under 44.2 tonnes. This marked the 14th consecutive month of profit-taking by investors. However, the quantity of gold sold was notably lower, down 23.2% from September’s six-month record.
Despite this, BullionVault clients’ gold holdings increased in value by 26.9% in British pounds, rising to a record £3.0 billion.
Silver Investment Trends
In addition to gold, silver investments also saw declines in Western Europe and North America, with net sellers liquidating 16.4 tonnes in October. This drop erased summer gains, leaving silver holdings at their lowest in 45 months at 1,146 tonnes. However, the value of silver investments increased by 41.2% to a record £954 million.
The number of silver buyers rose sharply, increasing by 66.4% from September’s six-month low. This surge led to a modest rise in the Silver Investor Index, which climbed 2.1 points to read 51.0, indicating a slight preference for buying over selling for the sixth month this year. Silver prices also increased by 11.7% in October, peaking at £26.85, marking the highest month-end price since April 2011.
Conclusion
As gold and silver investments show contrasting trends in the U.S. and Europe, the upcoming U.S. election continues to influence market sentiments. Investors are reacting to geopolitical uncertainties and economic pressures, leading to increased interest in precious metals as safe-haven assets.
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