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German Investors Now World’s Largest Gold Buyers

Today, gold is increasingly viewed by German investors as a regular form of saving: 25% of those surveyed in 2016 said their gold purchase had been part of a regular review of their investments, while 23% said it was part of their retirement planning.

We should all learn some German

If we are to believe Western media then this year’s decision by various central banks to start unwinding easy monetary policy is a signal that the gold price is set to fall. However Germans gold demand suggests otherwise.

It is clear that German investors are not swayed by the ‘newspeak’ the rest of the West seems so taken by. Whilst it is undoubtedly the 2008 financial crisis that set off the boom in gold demand, it is the value placed on gold as a diversifying asset that has sustained the market.

The ratio of investors buying gold bars and coins compared to those selling is around 10:1. This is despite the economy looking healthy and unemployment at its lowest since the 1990 reunification.

Clearly, German confidence in the economy is not expressed through their gold investments any longer. Instead it is their confidence in gold that keeps the market strong.

Investors and savers would be wise to pay attention to such investment logic. In countries such as the UK unemployment and wage growth are nowhere near as desirable as we see in Germany. Additionally, there are increased further uncertainties.

When the Germans sensed uncertainty following the financial crisis they did not panic about the global situation. They instead took a long hard look at their own banking system and began to diversify their savings. As a result they rediscovered their trust in gold which continues to grow year by year.

China Total Debt, 2004 - 2017

China Total Debt, 2004 - 2017

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Jan Skoyles
Jan was inspired to work in the gold and silver investment markets after working with fund manager Ned Naylor-Leyland, at Cheviot Asset Management. After working with Ned in 2010 Jan wrote her dissertation on the use of precious metals in the monetary system, and graduated with first class honours from Aston University in 2011. Jan then joined The Real Asset Company, and became Head of Research in September 2012. Her thoughts and opinions on gold prices, when to buy gold, how to buy gold, and many other issues facing gold investors, are sought by a range of media including investment sites such as Kitco, GATA, Lewrockwell.com, national media outlets including the Mail on Sunday, The Telegraph, and news channels like RT.
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