BullionVault Gauge of Client Buying Drops to 5-Month Low

BullionVault, an online service for investors to buy and sell physical gold and silver, said its Gold Investor Index dropped to a five-month low in February.

The gauge fell for a second month, slipping to 54.4 from 54.9 in January, the London-based company said today in an e-mailed report. That’s the lowest since September. A reading above 50 means more buyers than sellers. Gold slumped 5.1 percent in February, a fifth straight monthly drop and the worst run since 1997. It traded at $1,582.27 an ounce by 8:02 a.m. in London and is down 5.6 percent this year.

The metal rallied the past 12 years as nations from the U.S. to China pledged more stimulus to bolster economic growth. Investors sold the most metal ever from gold-backed exchange-traded products last month as global equities reached a four-year high, data compiled by Bloomberg show. While the 80,500 ounces of American Eagle gold coins sold by the U.S. Mint in February was down from the 150,000-ounce total in January, it was still 28 percent more than last year’s monthly average.

“With stock markets rising this new year, it’s natural for gold prices to struggle,” Adrian Ash, head of research at BullionVault, said in the report. “Investors continue to lose patience with central-bank policy. Sentiment outside the City and Wall Street remains positive towards bullion,” he said, referring to the financial districts in London and New York.

The gauge reached a one-year high of 58.3 in December and peaked at 71.7 in September 2011, the month gold reached a record $1,921.15.

BullionVault’s customers own about 1.11 billion pounds ($1.67 billion) of gold, the company said. The metal is stored in vaults in London, Zurich and New York.

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