Investors saw gold’s significant decline in May as an opportunity to increase their holdings of the yellow metal, says a new report from BullionVault. Amid a potential interest rate hike by the Federal Reserve and positive US economic data, gold futures dipped 7% last month.
BullionVault’s Gold Investor Index spiked to 55.8 in May, up from 53.5 in April. This is the highest it has been since April 2013. Adrian Ash, BullionVault’s head of research, notes that demand continues to be strong this month, even with gold’s recent rally since hitting
The company’s Silver Investor Index also rose to a 11-month high of 56.1, up from April’s 50.8.
The index monitors the balance of private investors who are either beginning their gold holdings or growing them to those who are looking to reduce or sell their holdings. Anything above 50 suggests there are more gold buyers than sellers in the market.
What else is driving demand for the precious metal? Ash alluded in the report to the US central bank unlikely raising rates in June and a potential exit by Great Britain from the European Union.
Weak US employment data means there is no chance of a June rate rise from the Federal Reserve, and little chance of a rise in July. Growing fears around what a Brexit vote will do to asset prices in [two weeks] is also buoying demand for physical gold.
Gold futures settled on June 2 to their lowest level since
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