Despite what seemed like a challenging year for gold and silver in 2014, analysis of GoldMoney's customers shows an interesting story which has silver as its star actor and a backstory for gold which is hidden behind the main action.
Gold may have slightly fallen from US$1,201.50 from 31st December 2013 to US$1,199.25 on 31st December 2014, but that is only in relation to the dollar. In terms of all the other major world currencies gold actually rose. For example it ended 2013 at GBP 726.99 per ounce, but it ended 2014 at GBP 769.84.
Head of Dealing and Settlements at GoldMoney, Roland Khounlivong said, '2014 was all about the dollar's strength, but that ignores what was going on in the rest of the world's economies. While Britain's performance was fairly positive, the pound still lost ground against gold which continued to act in its safe haven capacity for many people around the world.' The most interesting story of the year, however, is in the technical analysis of silver buying's behaviour. Silver prices fell more than 18% over the year, but GoldMoney's silver under management has barely changed.
Roland said, 'There was some selling waves, but there was also a great deal of tactical buying, with two clear motivational turning points. The first was in June where the price had been steadily dropping since March, customers simply weren't buying silver (net sellers) in the first five months of the year, but as soon as prices hit the $19/oz support level, they started buying on a big scale (net buyers). The buying continued, despite falling prices again, until September. With prices continuing to fall customers stopped buying and waited for a 23% discount on the year's peak, before returning to their buying spree. The buying interest in silver then continued for the rest of the year with silver still looking to be a bargain buy.'
2015 has begun with a positive trend for gold and silver prices amid turmoil in other commodity markets and economic uncertainty in many economies. Roland said it's going to be an interesting year, 'Gold is currently bucking historic trends and going in the opposite direction to oil prices and inflation. Quite simply investors seem to be hedging their bets and adding gold into their portfolio to provide diversification and a safe haven amid further economic uncertainty.'
NOTES TO EDITOR
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GoldMoney is one of the world's leading providers of physical gold, silver, platinum and palladium for retail and corporate customers. Customers can trade and store precious metal online easily and securely, 24 hours a day.
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GoldMoney has offices in Jersey and Hong Kong. It offers its customers storage facilities in Canada, Hong Kong, Singapore, Switzerland and the UK provided by the leading non-bank vault operators Brink's, Via Mat, Malca-Amit, G4S and Rhenus Logistics.
Historically gold has been an excellent way to preserve purchasing power over long periods of time. For example, today it takes almost the same amount of gold to buy a barrel of crude oil as it did 70 years ago which is in stark contrast to the price of oil in terms of national currencies such as the US dollar.
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