German Investor Demand for Gold Drops

Over the last couple of years, Germany has observed a significant drop in retail gold investment. In 2022, the European country was the second largest market for the precious metal’s investment, generating 185 tons of net gold coin and bar demand. Last year, this figure dropped dramatically to 47 tons. In the first half of 2024, retail investors in Germany purchased only 5 tons of the precious metals.

A recently conducted online survey carried out by Toluna, which involved more than 3,000 investors in Germany, sought to determine what may have affected retail investment in the last two years. The survey determined that despite the decline in retail investment, gold was still a popular investment in the country, with 37% of the investors having invested in or held the precious metal at some point.

Gold was also found to be the third most commonly owned investment in the country, after stocks/shares and savings accounts.  The survey found that Germans viewed gold as a strategic asset, with the primary motives for investing in the metal being that it can be used as a hedge against inflation. Other motives included the fact that the metal affords investors better returns in the long-term as compared to cash held in savings accounts, it helps in portfolio diversification, and it is easy to sell and buy.

The survey also found that the current economic landscape had impacted investor confidence negatively, with the ZEW Expectation Index dropping from 19.2 in August to 3.6 last month. This may explain why investors in Germany have been selling more gold than they are purchasing it.

Of the investors who had ever invested in gold, 13% revealed that they had sold all or part of their gold investment since the start of last year. The main reasons for this were that some wanted to realize gains from higher prices, others needed spare cash, while some wanted to free up funds for larger purchases. In addition, 18% of the respondents who sold gold also admitted to doing so because they needed more funds to supplement their incomes as the cost of living continued to increase.

While this may be a bit discouraging, the survey found that 65% of investors who sold their gold only sold part of it. This may reflect the belief that holding physical assets and cash is the safest way to protect a person’s wealth.

Most of the investors surveyed also revealed that they would invest in gold again in the future, with geopolitical risks, possible future returns and dropping rates of interest influencing the likelihood of future investments in the precious metal.

This interest in investing in gold shows entities such as Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) that despite the observed dip in the number of Germans investing in gold, the appeal of the precious metal is still high and more money could flow into gold investments for years to come.

NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF

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