GERMAN GOLD BUYING: A Chart You Have To See

While EASTERN demand for physical gold investment remains strong, most of the folks in the WEST are bored with the barbarous relic as they continue to funnel their funds into highly inflated paper assets. However, the Germans seem to look at gold a bit differently… actually a lot differently.

Even though the Swiss continue to buy more gold on a per capita basis, German physical gold investment demand is the highest of all Western countries. How much higher? Let’s look at the chart below:

WEST Gold Bar & Coin Demand Q1 2015

According to the World Gold Council, total German physical gold bar and coin demand during Q1 2015 was 32.2 metric tons (mt), Switzerland ranked second with 13.8 mt and the U.S. came in third at 9.9 mt. Interestingly, German physical gold investment increased 20% compared to the same period last year while U.S. gold coin and bar demand fell 12%.

Matter-a-fact, German gold bar and coin purchases (32.2 mt) during the quarter account for more than half of total European demand (61 mt). On the other hand, the British, French and Canadians ranked the lowest in the chart taking the 5th, 6th and 7th spots respectively. What’s even more amusing, total physical gold investment from these three countries is about a tenth of German purchases.

Furthermore, Germans purchased more than three times the physical bar and coin investment than did Americans during the quarter. Now, as I mentioned above, the Swiss still buy the most gold per capita due to their long-term fundamental belief in gold ownership. However, if we compare German buying versus American… this is the result:

Germany population = 80 million (32.2 metric tons)
United States population = 320 million (9.9 metric tons)

Germany is actually buying 12 times more physical gold per capita than the United States.

Again, if we exclude the savvy gold buying Swiss, the Germans continue to be the strongest physical gold buyers in the West. Lastly, if we add up all the other Western countries total gold bar and coin demand including Switzerland, here is the result for Q1 2015:

Germany = 32.2 metric tons (45%)
Rest of West = 39.5 metric tons (55%)

Is there something the Germans know about gold that most of the folks in the West don’t?

NOTE:  It was brought to my attention by a new reader that I state gold in metric tons and troy ounces.  The reader thought this was a bit confusing for new folks learning about the industry.  I agreed.  Unfortunately, the industry publishes gold statistics in these two metrics.  I could convert everything to one value or the other, but anyone reading the published reports would see these two different metrics and still be confused.

Here is the conversion:  32,151 oz = 1 metric ton

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44 Comments on "GERMAN GOLD BUYING: A Chart You Have To See"

  1. Steve,

    This report seems logical since Germany has been trying to repatriate their gold from the NY Fed for years. There’s one word that sums up Germany’s desire for gold reserves… Weimar! The memories of that hyperinflation and what resulted is something Germans have never forgotten. This is a lesson for the world community on how to avoid the same mistakes and protect themselves from a similar fate.

    As you state EROI will be the final stake in the heart of paper instruments worldwide. I also believe central planner policies and expanding world debt will start the downfall.

    • Mark,

      Agreed. It seems as of the peak of global conventional oil production in 2005 and the falling EROI have forced the Fed & Central Banks to flood the world with Trillions of Dollars in liquidity to prop up a financial and economic system that should have collapsed a decade ago.

      This will end badly… especially for PAPER BAG HOLDERS.

      steve

      • @Mark
        LOVED, that title you gave for the…as Jim Willie says: “Paper Morons”…PAPER-BAG-HOLDERS!!! I’m still laughing about that one!

        • I like to think of them as the kind of people who stomp on a flaming paper bag left on their doorstep.
          We all know that trick, right?

  2. Robert Happek | May 29, 2015 at 8:35 am |

    Germany experienced within the past 100 years more than 4 different currencies. With every new currency introduced, people lost a large part of their savings. The fear to lose savings again seems to be very large in Germany. Indeed, Germany is the largest creditor country in the Euro zone. With no prospect to an end of the ongoing Euro crisis, it somewhat makes sense to buy gold, the ultimate insurance against currency devaluation.

    • Robert Happek,

      Yes, it makes sense why the Germans are buying more gold. However, when you see the numbers, it’s still surprising how much of total West gold physical investment they are buying.

      steve

      • Robert Happek | May 29, 2015 at 9:04 am |

        Steve, the high number correlates well with the fact that Germany is on a per capita basis, the largest exporting economy in the world, way ahead of China, Japan and the US.

        Lots of the German trade surplus was malinvested into sovereign Euro debt. An important factor is that Germany lost its sovereign currency (the Mark) with the introduction of the Euro. The German Bundesbank is in war with the ECB. All important factors in order to understand the German flight to gold.

        • good point. it also raises the spectre of a german defection to the east. The purchasing of gold may be a hedge to keep the option of siding with russia/china, knowing full well they will go nuclear gold standard if the imf doesnt give them a proper seat at the table

      • Maybe it’s surprising just how LITTLE gold other Western nations are buying.
        The US and Canada have natural reserves, but Western Europe has none.

    • Most people are buying paper currencies even in germany such scandiniavian krones and especially us dollar. everything else including gold is complete side show.

  3. I am a German and i am very surprised about the figures…
    not because Germans buying SO MUCH of Gold, but that others buying so much less…!!
    i think that less than 10% of our population is buying coins or bars…of dozens of my friends i know only one…
    in case of a crash more than 90% of our people will not be prepared…
    it is not common and definetely only a small amount of the population is keeping gold….
    i don’t have gold at all…but i am a silverbug/silverjunkie…..
    anyway: we are a gnome according to china or india…
    the analysis in the other comments are deeply correct, but the majority has not a single gram…
    i have to add only that a shares are not very popular in germany and especially the 60+ would prefer
    gold instead of shares….even if they have whether shares nor gold , majority would prefer gold…

    • Number are not 10%, it is less than 1% if not 0.1%

    • OutLookingIn | May 30, 2015 at 11:54 am |

      The 32.2 tonnes of gold by Germany in the first 3 months (90+days) of 2015 is laughably small compared to what China is doing. The latest stats from the Shanghai Gold Exchange show 42.493 tonnes of gold, just for ONE WEEK ending Friday May 22.
      Like comparing a mosquito to an elephant! If Germany is by far the largest destination for physical gold in the west, then the west is sinking ever deeper into “paper bag” territory! Paper will return to it’s intrinsic worth – zero. Unless we’re talking about toilet paper! But even that is one time use only.

  4. I’m not German, but my gold holdings have a German accent. Trade surplus is where the gold goes it seems… Freegold ?

  5. Why there is no demand og old in the west : simple. because you are losing money when paper investments returned double digits year after year…

    • Fred Hayek | May 29, 2015 at 6:30 pm |

      Yes, for the last few years this is true. But the short term thinking of so many westerners is highlighted by their inability to see or even consider an end to this central bank provided extravaganza.

      • Maybe but everybody made fortune with leverages for 3 décades and that cenbtral banks are 100% supportive of this view, it is not surprising…

  6. Silverwillwin | May 29, 2015 at 1:19 pm |

    And if you are one of the lucky ones who are holding physical gold and silver in Germany or for that matter anywhere else , and a hyperinflation event takes off DO NOT exchange even 1 ounce for paper currency !!

    Trade it for assets , property , real tangible things ,goods and services .

    People were trading their gold for paper currency back in the hyperinflation of weimar ( 30’s) and when they turned around to use it they discovered that the currency was worthless.

    • @Silverwillwin
      WE ARE ON THE EXACT SAME PAGE FRIEND!…Lets make a killing…SOON!

  7. Every nation and linguistic group has advantages and disadvantages in their cultures and their general way of doing things.

    The Germans and their close cousins the Swiss have generally always been very economically and financially conservative. I have never met any group of people who were as industrious and efficient in a more or less balanced way. The peoples as a whole never stop building, investing, and storing up for the future.

    Even when their cities lay in ruins, the Germans worked to arrange the rubble as neatly as possible to make the best of the situation and prepare for the future. This is very indicative of their culture.

    Writers always point out the hyperinflation of the 1920s as the source of German financial conservatism. While this is a valid point, after 30 years of observing and living on and off among the Germans, I believe that they are just naturally very practical and conservative in financial matters. The hyperinflation was a result chiefly of external forces and not a result of typical German behavior.

    I believe that the knowledge and significance of Gold and precious metals is probably greatest amongst the German speaking peoples. However, like many Westerners, they have many solid investment opportunities at their fingertips. This may explain somewhat less superficial interest in Gold than say, the Chinese or Indians.

    However, I believe that the day will come when the writing will be on the wall, and the Germans and Swiss will see it before most. These people will spring into action and bring every considerable financial tool they have available to bear upon the situation. They, and their governments, will buy every ounce of silver and gold they can get their hands on.

    There will be a “giant sucking sound” of silver and gold into these two nations that will make their Eastern competitors’ and the rest of the world’s – heads spin.

    • Tom Hofmann, Germany | May 30, 2015 at 8:35 pm |

      Good words about my Germany. Thank you.
      But, the “natural” Germans disappear from this Planet. The subhumans population is rising. German young students are stupid like shit. Younger workers earn the half of what I get.
      The older Generation from “good times” can buy Gold. The younger workers have enough to survive. Not in a dream they can think on Gold.
      This country is “deleted” in 10 years. Or Hitler-2.0 reloaded are coming back.

      • Thank you for your comment. Ich bedanke mich herzlich fuer ihr “danke”. A long time ago, I was in a Gasthaus in Aachen. I met a man there who was the first to tell me about gold. We shared a couple beers and I’ve never forgotten what he said. He was right !

        • QueenOfEurope | May 31, 2015 at 2:13 pm |

          I have been living in Germany for last 5 years. Honestly, I dont know who is buying so much gold. From about 100 people I know here only 3 people have something but not much.
          That means the 97% of others ordinary folks have no clue about gold.

          • QueenOfEurope,

            That’s about the right percentage. And as one of the commenters stated, I imagine most of the Germans buying gold are probably 40 or older.

            steve

          • This buying could have been made by tens of very wealthy people in germany.

            You have to remind that in germany, the last inheritance tax brackets begins above 30 000 000 euros !

      • Great insight. In fact Young générations are breed to fed up the money monster ie the “world of the work” : they are human machines in order to perform their task for 3 décades and when they get older, their NAV is halved.

        some french oligarchy said people should not able to live after stopping working.

        every additional piece of work would be used for people to bid up the price of the different assets, nothing more nothing less which are mostly held by the 0.1%

  8. Just to change the subject. I’m surprised that Mexico exports any of its silver. If they decide to keep it all what would happen if that 20% or more of global supply is suddenly not available ? They have a lot of power available imo and are not using it. Maybe they have deal with the US. They help the dollar and we let there citizens walk across the border. Just a guess.

    • Michael Butler | May 29, 2015 at 7:59 pm |

      good point considering the U.S. Domestic silver production is essentially consumed by one product, silver American Eagles which is not the primary consumer we are told…assuming the numbers are correct, the silver market is a strange beast that seems to defy logic year after year.

      • @Micheal Butler
        You bet its a “Strange Beast”…so strange JP Morgan is PILLING-UP on the stuff like its all going to be gone tomorrow! You bet your ashe that most “Financially Smart” folks are “Stealth” buying it…Don’t be surprised if suddenly metals brokers start giving excuses WHY they don’t have much “These days” giving all sorts of “Reasons” for the lack of it…other than the REAL reason…SHORTAGE!

  9. N. Americans aren’t going after the gold, they want the silver and that’s where the money is going. It seems that Canadians and Americans believe silver is the most precious of the precious metals and the best value. We continue record exports of gold yet have record sales and imports of silver at the same time.

    • You are absolutely right and it makes perfect sense.

      There is something like 800 million tons of silver produced every year to 90 million tons of gold.
      That’s a ratio of 8.9/1 yet gold sells at around 70/1 in price. Virtually all the gold mined is still available and, depending on the source, as much as 70% of the silver that has been mined has been used up.

      When you add in the fact that you can buy silver at its cost of production it makes silver the absolute best way to invest in PMs. So maybe Americans aren’t so dumb after all.

      Buy for cash and Stash.

      SteveW

  10. German coin and bar dealers seem more competively priced than UK dealers. It works out cheaper to buy from Germany and have it shipped than buy in the UK. Is this factored in to the equation?

  11. Hi guys,

    I am German, and read the article.

    It is pretty clear for everybody who is using the space between his ears that we are in the late autumn of the worlds fiat money System, including Dollar, Yen, Euro, Pound.

    Gold is just an insurance. An Insurance, you can´t yet elsewhere. It is wise to have 10…20% of your Money in Gold These days.

    You get independent from government and banks. And gold is anonymous, and accepted in the whole world.

    As reported above, Germans have the hyperinflation 1923 and the currency Exchange 1948 deeply in mind. During both eventy, all Germans lost all of their money.

    But dont overestimate the Germans.

    32 tons correspond to 1 million ounces.
    Roughly, 1 Million Germans bought one once of Gold this year, and 79 millions did not.

    About 5% of the Germans owns gold, and 95% do not.

    Maybe that the ratio is much bigger compared to the rest of western world, but still very low.

    All the best,

    Martin

  12. Germans ARE BUYING GOLD LIKE HELL at the moment, we can confirm this. They are clever enough to understand that the EURO is only coloured paper.

  13. Germany has 80,62m and Austria 8,474m – so the “grams per head” is 0,399 gram per german and 0,354 gram per austrian.
    -> This is almost the same
    The great buyers in Switzerland bought 1,708 gram per head. The French 0,0014 gram per head.
    -> This is 1220times more – WOW!

    Wouldn’t a chart be better which tells how much the average guy in a country bought? I am not sure, if a UScit knows that Germany has 10times the population of Austria or that France has 8times more than Switzerland (as I would not have any idea of the population of Alabama and Nebraska)?

  14. silverfreaky | June 1, 2015 at 1:37 am |

    What is pretty clear?PM’s are performing in times of inflation.Since 5 years we have no inflation.
    I think this game could last very long.PM was an loser investment.The horror for each investor.

    We are living in times where central banks print money out of thin air.This money is cheap.
    Are the debts to hight they will sell it to the ECB.But this money didn’t appear in the real economy.

    A game they can make as long as they want.I don’t like that.But realitiy proves that it’s true.

  15. It’s important to clarify one thing : is it the balance between imports and exports, or only imports ? Many big gold retailers based in Germany sell in the entire EU, so if it’s only about the bars that enter Germany, it is not what German bought.

  16. Wow! That UK gold demand! That was me!

  17. Still amazed by french number : less than 1 metric ton for the 5th world economic countries…

    unbelivable

  18. One of the questions I would have is with a program like this: http://buy.jedde.com
    that is German based and run that has like 200,000 members so far, and buys and sells gold globally. would ALL their sales not just count as German sales? I have no idea as to what their sales are nationally or globally but everything they sell is gold. I am in Canada and have bought from them. Wouldn’t my purchase show up as a German purchase? If so wouldn’t that skew the 32.2 tons? Not from me alone, I wish haha. But I’d bet the vast vast majority of those 200,000 are not Germans.

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