BullionVault’s Gauge of Client Buying Advances to Six-Month High

BullionVault, an online service for investors to buy and sell physical gold and silver, said its Gold Investor Index climbed to a six-month high in October.

The gauge rose to 54.3 last month from 53 in September, the London-based company said today in an e-mailed report. A reading above 50 means more buyers than sellers. October’s reading was below the level of 56 a year earlier and compares with a peak of 71.1 in September 2011, the month gold reached a record $1,921.15 an ounce.

Bullion is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value, and prices averaged $1,315.91 in October, the lowest since July. The Federal Reserve maintained its pace of bond purchases last week, saying it needs to see more evidence of an improving economy after last month’s 16-day partial government shutdown. U.S. lawmakers agreed to increase the nation’s debt limit on Oct. 16.

Washington’s short-term fix to the debt ceiling confirms there’s no will to tackle spending or money printing long term,” Adrian Ash, head of research at BullionVault, said in the report. “October’s drop in the gold price let savers build their insurance at lower cost.”

Gold for immediate delivery traded at $1,314.55 by 7:58 a.m. in London, for a 22 percent decline this year. While users starting or adding to holdings rose “slightly” in October, the number of net sellers fell 15 percent, the company said. Customers added back more than half of the 1.2 metric tons they sold from April to June and owned 32.4 tons by October’s end, it said.

BullionVault customers own about $1.4 billion of gold, the company said. The metal is held in vaults in London, New York, Singapore, Toronto and Zurich.

To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter@bloomberg.net

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