The French, who traditionally prefer to invest in real estate, after the global financial crisis in 2008 are still busily buying gold, thus becoming net buyers (they buy more than sell), according to CPoR, a key player in the French gold market.
In the period from September 2010 to September this year the amount of gold sold in France rose about two times - up to 2 tons, which, according to CPoR, is a significant increase in demand compared to neighboring Germany (3%) and Switzerland (7%), despite the fact that in physical terms it is much less impressive (119 tons in Germany and 91.9 tons in Switzerland).
However, at the national level progress is more than obvious: in 2010 buying volumes in France increased by 1.5%, in 2009 – by 0.9%.
This increased consumer spending was triggered by an aggravated situation within the frames of the sovereign debt crisis in Europe and a hike in gold prices to a record $1.92161 per ounce on September 6.
According to gold sellers, when its price goes up, the number of buyers is growing. In France this summer they even lined up at points of sale.
Many of the French prefer to buy gold in small ingots. In addition to private buyers, demand for the metal is felt on the part of jewelers and manufacturers in the nanotechnology sector.
At a time when stock markets weaken, the attractiveness of gold as an investment heaven increases, experts say.
The French for their part invest in yellow metal being fearful that banks in which they keep their savings may go bankrupt, while they view gold as their own capital not controlled by banks or the country’s Treasury.
In France buyers prefer to buy gold in the form of gold coins with the image of Napoleon or in 1 kg bullions. At the same time, very popular are mini-bars weighing from 50 to 500 grams manufactured by CPoR.
The 30% rise in gold prices in 2010 was a record. The ten-year growth in gold value was the most prolonged period of such price increases, at least since 1920.
The main factors supporting the value of gold, which is regarded by investors as a more reliable alternative to volatile currencies and companies’ shares subject to severe fluctuations, are the debt crisis in Europe and the acceleration of inflation in various countries.
Alexandr Shaburkin, Rough&Polished, Moscow
