German physical gold purchases increase to a decade high

Berlin (Aug 27)  Germany has always been the biggest physical gold buyer in Europe (traditionally). In the first half of the year gold demand has hit its highest level in a decade. Data from the World Gold Council (WGC) showed H1 demand for bar and coins in Germany increased by 35% from the previous six months, compared with 20% in the rest of the world.

Even as in other Western markets have also been strong, Germans, in particular, are looking at the yellow metal as a hedge against rising inflation and dealers say business remains good.

Raphael Scherer, a managing director at metals dealer Philoro Edelmetalle GmbH said “We have a long history of inflation fear in our DNA. Now the inflation risk is picking up,”. Its gold sales are up 25% on what was already a strong 2020. “The outlook for precious metals is very positive.”

Last month, the reopening of the economy saw German inflation jump to the highest in more than a decade. Negative interest rates in Europe are also making non-yielding assets like gold more attractive, Scherer said.

H1 demand for bar and coins in Germany jumped 35% from the previous six months, compared with 20% in the rest of the world, WGC data show.

Alexander Zumpfe, senior trader at refiner Heraeus Metals Germany GmbH & Co. KG stated gold has “always played a certain role among German investors,”. He added, “With the increased buying interest in recent years, however, it has become even more present.”.

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