European Gold Sales Surge on Economic Uncertainties

Europeans bought a lot more gold in January. Investors turned to the yellow metal to protect themselves economic turmoil that could result from Greece leaving the eurozone and the oncoming wave of European quantitative easing. The price of gold in euros has already risen 9% in 2015, putting it at a 21-month high.

Europeans are acting fast as the euro continues to lose value against the dollar. Banks and gold dealers around the continent are reporting a huge surge in sales.

Greeks prefer buying British Sovereigns produced by the UK Royal Mint. The head of bullion sales at the Royal Mint said, “There has been a noticeable increase in demand this last quarter.”

Indeed, in January alone, the Bank of Greece sol 5,849 one-ounce Sovereign gold coins. Compare this to 7,857 coins sold in the entire fourth quarter of 2014. The surge in buying was particularly noticeable leading up to the Greek elections, which put the essentially socialist Syriza party into power. In the last week of January, CoinInvest.com reports that it sold about €2 million worth of gold to Greeks, while an average week would have only sold about €200,000 worth.

Not only are Greeks buying gold, but they’re also pulling their cash out of the banks in anticipation of a major financial crisis. At least €11 billion were withdrawn from Greek banks in January. One economic analyst said:

The story of the Greek deposits is not one of a bank run but a bank marathon. The smart money is long gone and there are few accounts with more than 100,000. The true barometer of fear is the amount of hard cash that is withdrawn, not how much is transferred outside of Greece. This has gone up the past two months.”

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!