In 2022, Germany was the second largest market for retail gold investment. It boasted a 185 tonne net bar and coin demand, but that number slumped to 47 tonnes in 2023 and just 5 tonnes in the first half of this year.
But that isn’t to say Germany has lost its gold-buying ways, according to a recent report by World Gold Council Analyst Louise Street.
To investigate the slump in German retail demand, the World Gold Council contracted with Toluna to run a 10-minute online survey of more than 3,000 investors to explain the apparent dwindling demand.
“Spoiler alert: Germans are not falling out of love with gold,” Street said.
The truth in results
More than one-third of Germans have, at some point invested in gold, and 28% of them still do, making it the third most commonly owned investment after savings accounts (61%) and equities (46%).
Additionally, one of the top reasons for German investors to purchase gold was the fact that it is easy to purchase in small amounts, protects against inflation and is easy to buy and sell.
And it appears Germans are taking advantage of that final reason, as higher prices were quoted as being one of the top reasons retail investors decided to trim down their holdings in recent years.
Will Germans be returning to the market?
Street expects plenty of gold buyers to jump back into the market in short order, as survey results showed 22% of those polled are somewhat likely to purchase gold again, along with 20% saying very likely and 13% saying they will definitely purchase more.
“Even those who have sold gold are very open to buying again; notably, none of the 147 respondents who have sold gold since 2023 ruled out a future investment,” Street said. “The research gives us a sneak peek into the minds of German investors and the way they feel about gold. And, while the last couple of years have been challenging for gold demand in absolute terms, the evidence suggests that the relationship has very solid foundations.”
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