BullionVault’s Gauge of Client Buying Drops for 3rd Month

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

The gauge slipped to 53.3 from 54.4 in February, the London-based company said today in an e-mailed report. A reading above 50 means more buyers than sellers. Gold rose 1.2 percent in March, after sliding the previous five months in the worst run since 1997. It traded at $1,600.20 an ounce by 8:07 a.m. in London and is down 4.5 percent this year.

Bullion climbed last month as Cyprus’s 10 billion-euro ($13 billion) bailout prompted worries among investors that Europe’s debt crisis will worsen. The island nation is the fifth country to seek a rescue since the euro crisis began in 2009. BullionVault said it had its strongest day for first-time depositors on March 18 since January 2012 and the number of clients from Spain and Italy combined that opened and funded accounts in the week to March 24 surged.

“Events in Cyprus electrified interest mid-month,” Adrian Ash, head of research at BullionVault, said in the report. “That runs contrary to the recent trend, when gold investing had lost some of its urgency. Cyprus provides a stark reminder of the credit risks from which physical bullion is free.”

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 1.12 billion pounds ($1.71 billion) of gold, the company said. The metal is stored in vaults in London, Zurich, New York and Singapore.

Before it's here, it's on the Bloomberg Terminal.