Corona crisis causes a hype to buy gold

Many private investors in Germany have been buying more and more gold in the financial markets since the Corona crash. But investing in coins and bars could turn out to be bad business in the long term, especially since there are cheaper alternatives for regular gold savers.

Proaurum had to disappoint many potential customers in March. In the first days of the lockdown in Germany, which was accompanied by a price drop on the stock markets, the web shop of one of the largest gold traders in Germany was always unreachable. “We were overrun by hundreds of thousands of calls,” says Proaurum boss Robert Hartmann. “Our IT systems couldn’t do that.”

 

Similar situation for other gold providers

The picture was similar for other providers of coins and bars. A lot of money also flowed into financial products like Xetra-Gold, which are secured with physical gold. According to the World Gold Council, the products had net inflows of $ 23 billion in the first quarter, more than in a quarter before. Global gold trading volume in March was reported to average $ 236 billion a day, an increase of 61 percent year over year. The members of the World Gold Council lobby organization are mainly gold mine operators.”Demand is huge, greater than at the height of the financial crisis,” observed Hartmann at the beginning of April..