2017 has been another fascinating year for the gold industry. This shiny precious metal captures the imagination quite unlike any other commodity on earth and was never far away from the headlines.
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Back in April this year, news broke that the largest ever hoard of gold in British history had been discovered stashed in an antique school piano. The find has an estimated worth of £500,000 and contained over 913 sovereigns minted during the reigns of Queen Victoria, Edward VII and George V. Proceeds of the find were split between the piano tuner that found them and the piano’s current owners, Bishop’s Castle Community College, Shropshire.
Gold demand has generally been fairly languid across much of Europe in the last year but statistics published from a money metal article back in August showed that German and UK demand for gold ETF’s has risen dramatically in the last year and a half. Figures show that between Q1 in 2016 and Q2 in 2017 investment in German Xetra-Gold rose by 97 MT, whilst investment in U.K. Source Physical Gold rose by 38 MT. Investment in U.K. ETFS Physical Gold also rose by 31 MT.
This may be partly a reaction to Brexit and the fact that German citizens are worried about ongoing issues with the European Central Bank (ECB) with regards to money printing and bond purchases. There are also serious geopolitical concerns caused by the US imposing sanctions on Russian imports as a lot of Germany’s imports are from Russia.
Data published by the London Bullion Market Association (LBMA) earlier this year revealed for the first time ever, exactly how much gold is being stored in Britain’s capital city. Figures published by the association revealed that around 7,500 tonnes of gold was held in London at the beginning of this year. This is the equivalent of 596,000 gold bars, or £227bn-worth of gold. 68% of London’s gold was held by the Bank of England who currently look after the UK’s gold reserves.
A surprising development in Germany this year saw the country send shock waves through the gold market, as they announced plans to recall all the countries gold currently being stored abroad, back to Germany by 2020. This involved moving nearly 400 tons of gold, worth around 30 billion, from the US and Paris back to Germany. Why this sudden decision Many believe it shows Germany’s current mistrust of the US whilst others believe Germany may need it to back a new Deutsche mark, should the eurozone break up.
We are still a long way off from running out of global gold reserves, but a new report by the GFMS team at Thomson Reuters this year revealed that total global gold production in 2016 fell for the first time since 2008. In total the world gold mine supply has fallen by 22 tonnes (3%) since 2015.
At Physical Gold, we pride ourselves on bringing you the latest gold industry news from the UK and around the world. To speak to one of our advisers about potential investment advice please call us on 020 7060 9992.
Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.