Based on trading activity of its clients, BullionVault said its ‘Gold Investor Index’ fell from 52.6 in September to 51.1 in October, back towards half-decade lows seen around New Year.
A reading of 50 signals a balance of net buyers with sellers across the month.
Gold saw the fewest net buyers since December during October and the most sellers since January 2015.
Silver, which is more volatile than gold according to BullionVault, saw its equivalent sentiment index fall in October to new series lows. Silver investors took the opportunity to lock in profits or cut losses last month as prices rose nearly 7%.
“October’s pop in prices gave existing gold and silver owners the opportunity to take a quick profit or reduce losses after the summer’s earlier falls,” said Adrian Ash, head of research at BullionVault. “Trouble is, that surge in silver prices wouldn’t have registered as a gain for anyone buying coins, nor even small bars, because dealing costs are too high.”
“Although we saw total client holdings by weight continue to grow in October, private investors remain wary of chasing prices, preferring instead to build their precious metals holdings more steadily, with a growing proportion acting to trade in and out as prices allow, especially with silver,” Ash continued.
“Looking ahead, US interest rate expectations will likely prove the key driver of gold and silver prices as the New Year approaches,” he added. “Investors expecting the Fed to lose its nerve again in December could do well to build a position in advance.”