Different countries, different attitudes among investors

Over the past decade, worldwide demand for bullions and gold coins has significantly risen. Nevertheless, there are huge regional and international differences among gold owners regarding buying motivation, consumer behaviour and assessment of gold as an investment property. In late 2016, the World Gold Council published the results of a comprehensive study which provides most interesting insights into differences in gold buying behaviour around the world. The study covers the four largest markets –  China, India, Germany and the US – which made for 58 per cent of global demand for physical gold in 2015.

In addition to cultural differences, geopolitical conditions determine the investment behaviour for gold. In developing markets, speculative approaches as well as a tendency to short-term exposures are much more pronounced than in mature economies. While in China 41 per cent of all gold investments are speculative, this form of investment can be observed significantly less in the US (15 per cent) and Germany (11 per cent). The (average) share of income consumers are willing to invest in gold varies widely between regions: while in the US, consumers invest only 17 per cent of their income in gold, followed by Germany at 20 per cent, Chinese private investors invest an average of 37 per cent. Second is India at 29 per cent. This can be explained by the wildly varying levels of investors' trust in their national currencies. In India and China, a respective 63 per cent and 61 per cent of all consumers trust gold significantly more than their own currency. In the US and Germany, their share is less than half of that. The same goes for the sense of security the possession of gold provides, which is also significantly higher in developing markets than in mature economies. The complete study containing a number of further interesting results can be downloaded here.