BullionVault’s Gauge of Client Buying Declines to Five-Month Low

BullionVault, an online service for investors to buy and sell physical gold and silver, said its Gold Investor Index declined to a five-month low in December as the metal posted its biggest annual drop since 1981.

The gauge fell to 52.9 last month from 54 in November, the London-based company said today in an e-mailed report. That was the lowest level since July’s 10-month low of 52.6. A reading above 50 means more buyers than sellers. December’s reading compares with a peak of 71.1 in September 2011, the month gold reached a record $1,921.15 an ounce.

Gold posted its first annual decline since 2000 last year as some investors lost faith in the metal as a store of value and as global equities rallied 20 percent. The Federal Reserve said Dec. 18 it will trim monthly bond purchases as the economy strengthens, easing concern about faster inflation. As bullion fell for a fourth month in December, sales of American Eagle gold coins by the U.S. Mint and imports by Turkey increased.

“Buying gold as financial insurance at last year’s lower prices could soon prove smart if the stock-market surge falters in 2014,” Adrian Ash, head of research at BullionVault, said in the report.

Gold for immediate delivery traded at $1,240.13 an ounce by 8 a.m. in London, after slumping 28 percent last year. It reached a six-month low of $1,182.27 on Dec. 31. BullionVault’s client holdings fell 1 percent during the year to 32.3 metric tons, it said.

The company’s customers own about $1.3 billion of gold, the company said. The metal is held in vaults in London, New York, Singapore, Toronto and Zurich.

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

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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