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Retail Gold Buying Eases in March as Cyprus Crisis Eyed, Survey Says

Tuesday, 02 Apr 2013 08:03 AM

The pace of physical gold buying among private investors slowed in March, while bullion market sentiment remained positive because of a near-bankruptcy in Cyprus, a survey by BullionVault showed on Tuesday.

BullionVault, an online physical gold and silver market for individual investors, said its Gold Investor Index dropped to 53.3 in March from 54.4 in February, marking a third consecutive monthly decline. The March figure was the lowest reading since last September.

The London-based firm has around 45,000 investors from 159 countries holding $2.2 billion worth of gold.

A reading above 50 indicates more buyers than sellers. While net buying by BullionVault's mostly buy-and-hold-type customers is seen as bullish, net selling could suggest individual retail investors are exiting the gold trade.

"This tells us that the general public is not buying into the U.S. recovery yet, even in the face of a stronger U.S. dollar and U.S. stock market," said Miguel Perez-Santalla, vice president of BullionVault.

On March 25, Cyprus reached a deal with international lenders for a 10 billion euro ($13 billion) bailout that would shut down its second largest bank and inflict heavy losses on uninsured depositors. Tight capital controls were also imposed to prevent a run on bank deposits.

BullionVault said that the weekend when the bailout deal was inked was its heaviest-trading weekend since mid-October.

In the week of March 17, when the Cyprus crisis reached its climax, BullionVault said the number of new customers from Spain and Italy who opened accounts climbed by 167 percent from its previous week.

In March, the price of gold climbed around 1 percent, snapping a five-month losing streak. A better U.S. economic outlook, reflected by Thursday's record high in equities benchmark S&P 500, also weighed on gold.

BullionVault's index peaked at 71.7 in September 2011 when gold hit a record high above $1,920 an ounce, while the index fell to 48.8 in February 2010, BullionVault's data showed.

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The pace of physical gold buying among private investors slowed in March, while bullion market sentiment remained positive because of a near-bankruptcy in Cyprus, a survey by BullionVault showed on Tuesday. BullionVault, an online physical gold and silver market for...
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Tuesday, 02 Apr 2013 08:03 AM
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