WGC Unveils Comprehensive Analysis of Gold Market Trends in Germany

SEATTLE (Scrap Monster): The December 2017 edition of Gold Investor published by the World Gold Council (WGC) provides a detailed analysis of gold market trends in Germany. Apart from comparing the behavior of German investors with investors in other nations, the report also provides an outlook for gold investment in Germany. In general, WGC presents optimistic outlook about gold’s performance in 2018.

Germany has the second largest gold holdings among world countries, after the US. The country’s gold reserves amount to almost 3,400 tonnes. Over the past five years, the German Bundesbank- the authority in charge of these reserves has taken a series of steps to boost the transparency around Germany’s gold holdings. The country’s gold reserves are held in three locations- the Deutsche Bundesbank in Frankfurt am Main, the Federal Reserve Bank in New York and the Bank of England in London.

John Reade, Chief Market Strategist at the World Gold Council notes that there exist several reasons to believe that gold could maintain it’s upwards trajectory in 2018. The monetary policy by the US Central Bank will continue to be a significant driver of world gold demand. The ongoing strength of US equities and the trajectory of the US dollar are considered to be the other two potentially important factors for gold. Specifically, German economy is expected to maintain its momentum, providing good support for the country’s gold bar and coin market.

According to WGC, Germany’s gold investment market has boomed in the past 10 years. From a rather small market before 2008, the market has undergone radical transformation. By 2009, the market turned out to become one of the largest in the world. The investments into German gold products totaled almost €7 billion in 2016. The annual bar and coin demand has almost quadrupled. The country’s gold-backed ETC market too has registered impressive growth.

The Gold Investor Report also states that year-to-date gold returns have remained competitive in 2017, when compared with other major financial assets. Interestingly, financial gold has accounted for more than a third of ground gold stocks. So far this year, gold has been inversely correlated to stocks. At the same time, it has maintained positive correlation with bond performance. Also, gold has traded more than many other major financial assets during the year, WGC noted.