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Rattled European consumers buy more gold in January

Feb 12, 2015

LONDON, Feb 12 (Reuters) - Physical gold sales in Europe jumped in January, dealers said, as concerns over the euro zone's outlook sparked by central bank action and anti-bailout party Syriza's victory in Greek elections drove consumers to load up on bullion.

Financial markets were roiled last month after the European Central Bank unveiled a new plan to pump billions of euros into the economy, the Swiss National Bank cut the franc's peg to the single currency, and Syriza won a snap election in Athens.

That prompted a 6.7 percent drop in the euro versus the dollar, its worst monthly performance since mid-2012, and sent investors scurrying into other assets, including gold.

German coin dealer Degussa reported a 35 percent year-on-year increase in its gold coin sales in Germany in January.

"Business in January was really booming, with the election in Greece, and the Swiss franc earthquake driving many customers into buying gold," Degussa chief executive Wolfgang Wrzesniok-Rossbach said. "In the end, we had a new record month in Germany as far as client turnover is concerned."

Clients were selling gold as well as buying, he said, in response to a rally in euro-denominated gold prices to 21-month highs.

"Motives were different -- mostly profit taking, but a few were also disappointed because of the price drop in the last 18 months and left the market now that they are, in euro terms, back to their entry level," he said.

The Austrian Mint, one of Europe's largest in terms of coin sales, said its sales of Vienna Philharmonic gold coins rose 6 percent year on year in January, to 44,715 ounces.

In contrast, gold coin sales by the United States Mint fell 11 percent last month, while the Perth Mint's sales of gold coins and minted bars slumped to their lowest in nearly three years.

"Europe's QE programme and the threat of 'Grexit' has seen many European savers turn to physical gold this year," Andrew Leyland, an analyst at GFMS, said. "So far it's also a bet that would have paid off, with euro denominated gold up by 9 percent from the beginning of the year."

Physical gold and silver dealer CoinInvest.com reported that its gold sales to Greek customers leapt to around 2 million euros' worth in the last week of January, following the Greek elections.

"We would usually expect to sell around 200,000 (euros') worth of gold to Greek customers in a normal week," it said. "We also saw a considerable rise in the number of new customers, which have doubled."

Gold priced in euros reached a 21-month high in January at 1,167.94 euros an ounce, while spot gold rose 8 percent, its biggest monthly rise in three years, to end the month at $1,282.80 an ounce.

http://www.reuters.com/article/2015/02/12/gold-sales-europe-idUSL5N0VJ2Y920150212