Germany Continues To Lead The West In Physical Gold Demand

Even though most of the world’s gold supply continues to flow to the East, German demand for physical gold investment remains the highest in the West.  This is probably due to a percentage of Germans who are not at all happy with the current financial system with the European Union, including the ongoing situation in Greece.

According to the World Gold Council’s Q2 2015 Demand Trend Report, German gold bar and coin demand was 24.1 metric tons (mt) for the second quarter.   Thus, German physical gold investment during Q2 was 40% of the total in the West at 59.6 mt:

West Gold Bar & Coin Demand Q2 2015

As we can see from the chart, Germany was in first place at 24.1 mt, U.S. ranked second with 12.5 mt, Switzerland came in third at 11 mt, followed by other European countries (total of 7.7 mt), Austria (2.5 mt), U.K. (1.9 mt) and Canada (0.5 mt).  You will notice that France came in last by actually selling a net 0.6 mt of physical gold into the market in Q2 2015.

So, when the situation in Greece starting to heat up as a possible exit of the European Union (during the middle of June), the French thought the best financial strategy at the time was to sell gold.  LOL. 

Now, if we were just to focus on European physical gold buying (removing the USA and Canada), Germany would account for 52% of gold bar and coin demand in that region during Q2.  On the other hand, if we tally up the WEST vs EAST on physical gold buying, this would be the result:

West vs East Gold Bar & Coin Demand Q2 2015

Total Eastern gold bar and coin demand for the second quarter was 115.9 mt versus the West’s 59.6 mt.  Again, Germany accounted for the majority of the West’s physical gold investment (shown in its flag color on the chart).  Now, I realize the World Gold Council’s figures may not represent that total amount of gold flowing into China and India, but it gives up some guideline to just how much less gold is flowing into the major western countries.

We must remember, only 1-2% of the world’s population is investing in physical gold.  If private investment in physical bar and coin demand presently accounts for 25-30% of total world gold supply (yes, this may be conservative), what happens when another 1-2% get interested??  Forget about the masses, just a few percentage increase in physical gold demand will totally overwhelm the market.

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21 Comments on "Germany Continues To Lead The West In Physical Gold Demand"

  1. Just as an explanation for American readers.

    In Germany the hyperinflation of 1923 is still in the collective memory of the nation. That was one of the main reasons, why the Bundesbank always tried to make the DM (German Mark) a strong currency.
    Unfortunately this policy was kicked out of the window thanks to Mario Draghi and the southern European wishes of a weaker currency.
    We Germans know better than other Europeans what money printing will do to the value of your money because our grand grand parents lived through hyperinflation.
    Thus the relatively high demand compared to rest of the western nations.
    You will also notice that Switzerland (which is 2/3 german speaking and has a lot of ties to Germany) and Austria (100 % German speaking and also many ties) have similar high demand as both are rather small countries (both about 8 Mio. people compared to 82 Mio. Germans)
    The MSM in Germany is not any better than the US counterpart, they try everything they can to convince the masses that gold and silver are some things of the past.
    But at least some part of the population knows that is outright wrong, and many more sense that this could be wrong.
    After all we had several (i think 4) currency reforms/switches in the last 100 years and every time people lost a lot of money. Stuff that cost 1 DM 1995 now costs 1 Euro and the exchange rate was nearly 2:1
    So just in the last 20 years the purchasing power of the Euro has decreased by about 50%

  2. Germany sure is a nation that loves gold and silver (see at the voice Weimar Iperiflation 1923-24) but you have to know that a lot of peope in Europe buys metals from Germany by post. The reason is that VAT on silver is much less in Germany than everywhere else and the biggest dealers are there so even gold (no VAT everywhere in Europe) is cheaper and more abundant.

    • I guess all of your points are valid, but nevertheless if the SHTF i am pretty sure that Germany,Switzerland and Austria will have a lot more gold/silver than France,Spain or Italy for example.
      It is rumored that private German citizens own about 8.000 tonnes of gold, which would be considerably more than the 3.000 plus tonnes that the Bundesbank “owns”. Especially if you consider that 2/3 of that are still in New York and London and are unlikely to completely return to Germany.

      • Germany will never see the Gold from the USA again,because it is not there.So the Germans have to good fortune to receive useless US Dollars.
        That is what you get when you have spineless politicians
        Its a good thing you have enough Taxpayers to get the Cart out of Mud.
        As always

      • Ja, i guess you’re right … but italians as well have a lot of gold, especially in CH and elsewhere. We are a country of people that traditionally spare money for the bad times and i think italians as well, luckily, have a lot a gold.

        Personally I’ve been in Munich/Nurnberg 1 or 2 times specifically to buy metals with cash and i’ve bought online a few times from Germany so.. i probably result as “german demand” in statistics.

        And they tell me a lot of russians too buy bullion in DE … german demand as well 😉

  3. The gold in question is being bought by individuals – not by countries. For that reason, the numbers need to be adjusted by the size of the population in order to be meaningful. It turns out that on a per capita basis, the largest gold buyer is Switzerland followed by Germany and Austria (roughly equal), then followed by the rest of Europe. The US appears to be (on a per capita basis) on rank six, ahead of Great Britain, Canada and France.

  4. That’s a lot of Gold ! Where’s it all coming from? I’d be interested in learning what is global mine output for a year. And with the miners taking it on the chin, aren’t they producing less and less ? I wonder if there is enough to supply this years festival and wedding season in China and India. If there isn’t much around, it ought to get more expensive, in spite of GOLD_man Sacs and JPM (silverman) and their monopolies. Can anyone figure out how to demand an audit on Americas Gold holdings ? I’d be curious as to how much they have and how much is on loan or being used as collateral over and over again.

    • “Can anyone figure out how to demand an audit on Americas Gold holdings ?”

      Any request would fall on deaf ears. I heard recently that as many as 7 audits were “lost” and the last official audit was in the 1950’s! We supposedly have 8.133 mt tonnes and that is optimistic at best. I heard that China & India alone almost consume all the yearly mined supply so the rest is coming from western central banks. China’s recent low-ball news on gold purchases is proof that the public can’t know who actually has what in storage. If we found out what China actually has and how little the US probably has the market panic would be severe.

      The day we find these things out it will be too late for all the johnny-come-latelys who want metal at any price.

    • elect Trump

  5. As more fiat currency is created to support all the illegal migrants worldwide people will seek precious metals as a store of value to counter the continuous debasing of their cash holdings..

  6. robert sinclair | August 15, 2015 at 12:09 am | Reply

    In 1893? there was enough gold in the world to fill a cube 22′ x 22′ x 22′ if you add on the the world production since and knock off a bit for wastage and you should get an idea of the total amount of gold. Someone do the the math please?

  7. I read here always how many silver is selled and how many silver has produced by miner A,B,C.,…..
    But obviously the number of the comex has no value.

    What about realistic numbers how many physical silver is available?Please no datas from silver and gold seller.

  8. The time has come to ‘shit or get off the pot’ . There’s going to be a long line of angry late comers. Buying as much as they can afford, all at once.

  9. From whom did the Germans and the USA import the gold?

  10. “Gold is money, nothing else.”
    JP Morgan

    The first year law student is taught that a debt incurred by individual or corporation is called a NOTE.
    Anybody ever looked at our fiat currency? It says Federal Reserve NOTE.
    Nothing like being smart enough to carry around a piece of paper that says;
    Dear owner of this piece of paper we call currency. You owe the Federal Reserve this debt back with interest.
    Golly! Smart ain’t we?

    Gold is money, nothing else. Believe it.

  11. Hi Steve,

    I just did a quick overlay of a 30 year oil and silver charts from macrotrends.net and it seems that silver is following the price of oil closely, here is the chart:

    http://clevertechie.com/img/oil-silver.jpg

    Is the price of silver really so affected by the price of oil and with the forecasts of oil tanking even lower to $30, it seems that silver will go even lower, to $10?

    • Far & away silver price is just a reflection of COMEX & other paper/digital manipulations, not oil’s price. When the prices of G and S can’t be manipulated oil and a lot of other things will be tracking PM physical prices.

      • David,

        I’m fully aware of the manipulation and COMEX paper price vs physical price, however that is the reality that we’re living in right now, until there is a reset, real physical shortages and failures to deliver on a large scale, we’ll keep seeing suppressed prices. All I’m saying is I wouldn’t completely disregard the effect of oil price on silver, after all that is the main source of ENERGY which silver mining companies use to extract it from the ground.

    • Walter,

      If you haven’t checked out my THE SIjLVER CHART REPORT, I have a oil-silver price chart from 1900-2014. While the price of oil has been the overwhelming factor in determining the price of silver over the past 100 years, this will change in the future.

      Why? Because of peak oil. Peak oil will destroy the valuation of most paper assets as well as most physical assets. So, at some point, the price of oil will no longer be the driver of the price of silver, rather the movement of investors out of increasingly worthless paper assets and into gold and silver to store wealth will be.

      This phenomenon will be the new price factor in the future.

      steve

      • Yes Steve that makes sense, looks like it’s not looking too good for the short term paper price of silver though, and I understand that is actually a good thing, if the paper price of silver goes down from here, at least for a little while, we can all accumulate more =] I just recommend to keep in mind the time factor when putting most of your wealth in silver, though there are many indicators pointing to the imminent collapse, I would use a more realistic time frame and expect to hold metals until at least 2020…..You wouldn’t want to sell your PM’s at a loss just so you can pay off your credit card bill….(this is where the paper price of silver actually matters).

  12. As far as the European politicans print euro banknotes as much as they can the European citizens will buy gold and silver coins… if the citizens are able to use their brain and if they have “free” paper money….

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