London: Add Bitcoin to the list of things denting gold’s appeal.
The yellow metal’s rally has falted over the past two months as the dollar strengthened and global equities set new records, while concerns over Brexit and Catalonia’s push for independence failed to drum up notable haven demand. Now, Bitcoin’s surge is attracting investor interest toward the cryptocurrency and away from the metal, the biggest online vaulting service said.
According to Google Trends, searches for “buy bitcoin” have overtaken “buy gold” after previously exceeding searches for how to purchase silver. Last month, the amount of gold changing hands on BullionVault’s online trading platform dropped by almost a third from the 12-month average.
“With the US stock market setting fresh all-time highs day after day, it’s no surprise gold prices have retreated,” Adrian Ash, research director at London-based BullionVault, said in a report. “Some investors are also being distracted by the noise around Bitcoin and other cryptocurrencies. Altogether, that’s made interest from new gold investors the weakest since the metal’s half-decade price lows of end-2015.”
Gold has dropped about 6 per cent since touching a one-year high on September 8, cutting this year’s gain to 11 per cent. Bitcoin jumped more than sevenfold this year and more than 13 times the advance of the best-performing commodity tracked by Bloomberg.
Still, BullionVault’s Gold Investor Index, which measures the number of buyers against sellers edged slightly higher to 54.6 in October. A number above 50 indicates more buyers. The firm’s gauge of silver buying fell to 51.6 from 52.3.
BullionVault users own about $1.5 billion (Dh5.5 billion) of gold, $373 million of silver and $9 million of platinum.
