WGC Sees Latent Demand for Gold Among Retail Investors

The German investment market has undergone radical transformation over the past 10 years.

SEATTLE (Scrap Monster): The recent research report titled “Germany’s Golden Decade” published by the World Gold Council (WGC) predicts further growth prospects for gold investment products in the country. The gold industry stands a chance to tap the latent demand for gold among retail investors, it said.

According to WGC, the gold investment market in Germany has boomed during the past decade. The successive financial crisis and uncertainties saw increased number of investors turning to gold as a means of protecting their wealth. Consequently, the market saw introduction of innovative products to cater to the needs of investors. The country reported investment of nearly €6.8 billion during 2016 in various gold investment products. Also, there is still room for further growth, said WGC Report.

The German investment market has undergone radical transformation over the past 10 years. The bar and coin demand was negligible before 2008. The demand had averaged around 17 tonnes between 1995 and 2007. The annual bar and coin demand skyrocketed by more than four times from 36 tonnes in 2017 to 134 tonnes in 2009. The assets under the gold backed ETC market jumped from zero in 2007 to around 36 tonnes in 2009. Since 2009, the German gold investment market has reported steady growth.

Banks have been acting as wholesalers and retailers in German gold market for long time. The platform has widened now. As per industry estimates, there exists at least 100-150 non-bank bullion dealers across the country. They offer convenient online platforms, making it easy for investors to purchase gold, even in small quantities. The gold ETC schemes allow investors to take physical delivery of the gold upon redemption of their investment.

Results of the Kantar TNS survey, conducted on behalf of WGC indicate that 59% of German gold investors believed that gold will never lose its value in the long-term. 57% of respondents were found to have in invested in gold bars and coins as the safest means to protect their wealth. Also, the survey found that institutional investors were more interested in buying ETC products, whereas bars and coins enjoyed high demand from retail investors.

WGC predicts that there is still room for further growth in gold investment demand, despite the dramatic growth seen during the past decade. The latent demand for gold among German retail investors suggests further growth prospects for demand for gold bars, coins and ETCs in the country.