Does Record Low Gold Volatility and Sentiment Mean Time to Buy?

Does Record Low Gold Volatility and Sentiment Mean Time to Buy_

Gold volatility and silver volatility are at record lows. See what demand for gold and silver is like around the world and also in New Zealand. Gold is boring – does this mean it’s time to buy?


Silver volatility is the lowest it has been since 2001.

Silver Volatility Chart


But volatility in gold is even more extreme. Now sitting at levels last reached in the mid 1990’s!

In short gold (and silver) is boring. When the gold price and silver price is going nowhere, no one is interested. Whereasn either plunges some people will jump in to buy. When gold and silver prices move higher others will buy on momentum.

Little wonder then that worldwide Google searches for the search term “buy gold” are the lowest they have been since October 2007.


Precious Metals Sales Numbers at Major Mints Also Down

Also little wonder that sales numbers from Mints in the western world are also at or near record lows.

At the Perth Mint, total gold coins and minted bars sold in May were the lowest they have been since April 2017. While silver was up slightly on April 2018 but still at pretty low levels.

Perth Mint Sales_May18
This chart shows total monthly ounces of gold and silver shipped as minted products by The Perth Mint to wholesale and retail customers worldwide. It excludes sales of cast bars and other Group activities including sales of allocated/unallocated precious metal for storage by the Depository.



While at the US Mint in May they sold 24,000 ounces of American Eagle Gold Coins. This was a big increase from the April figure. However April sales were at a 10 year low. But taking the average for the last 5 years for May, 24,000 was only half this number.

Reuters reported “May sales of U.S. Mint American Eagle silver coins fell 58.5% percent from April to 380,000 ounces, the lowest May since 2005”.


Major Gold ETF Also Shrinks

The largest gold ETF GLD also shrank by 4% in May. The largest fall in holdings since August 2017.

Although in contrast the holdings of the smaller ETF’s in Europe and Asia actually rose in May, according to World Gold Council data.

Gold ETF Monthly Flows - Chart



Mint Gold and Silver Sales Don’t Tell the Full Story

However all these numbers don’t tell the full story.

We are noticing more people preferring to buy back dated coins. Such as the Royal Canadian Mint 1oz Silver Maple Leaf, the Perth Mint 2016 Silver Kangaroos, and the US Mint American Silver Eagles.

Our suppliers back this up. There is now more limited numbers of these coins from previous years available in the secondary market.

This says buyers are more price conscious and preferring to pay the lower premiums for older products than the latest Mint releases.

This buying in the secondary market will have certainly dented the sales of new coins from the Mints.

But the reports of coins sales collapsing is not necessarily as bad as it may look when only viewing the new coin sales numbers.


Not Many New Buyers

We’re also noticing there are not many new buyers for gold and silver currently. The vast majority of our gold and silver purchases are coming from regular or repeat buyers currently.

So lack of new buyers would back up the low numbers of “buy gold” searches in google trends.


More Precious Metals Sellers Than Usual

Over the last month or so, there has been more selling of gold and silver too than we have seen for a while. Some people have had enough and are “throwing in the towel” it seems.

Interestingly regulatory filings in the US show that in the silver ETF SLV, there is a trend among “professional money managers whereby larger funds have been buying while smaller managers sold.

Institutional investors running $100 million in funds or more have to file 13F reports at the end of each calendar quarter. Latest data say that over the first 3 months of this year, 157 such money managers bought 17.6 million shares of the SLV. Barely half as many shares were meantime sold by 159 managers, some 9.7m.” Source.


In New Zealand Silver Preferred Over Gold

Our buyers are showing a definite preference to buy silver over gold currently.

In fact much like the silver ETF SLV, we could make a good argument that the smart money here in New Zealand is buying silver in large volume too. We have seen some significant purchases of silver lately.


Conclusion: Contrarian Buying Opportunity?

Overall silver and gold volatility and sentiment are a long time lows.

There is little interest from new buyers of gold and silver. But the “smart money” seems to be buying (silver especially) while smaller players are selling.

With global share markets and property prices all near highs, it looks like people are very complacent about the state of the world. Interestingly the last time the “buy gold” search volume was this low was just prior to the financial crisis.

Coincidence? Who knows?

But these indicators do seem to be sending a contrarian buying signal for gold and silver currently.

This lack of interest is also occurring while the silver chart is getting very compressed within a large wedge formation.

Chart of NZD Silver vs USD Silver

Silver will have to break out of this before too long. With so little interest and negative sentiment, the odds favour a break up rather than a break down.

So this looks like a very good time to add to or begin your financial insurance and buy gold or silver.

Read more: When to Buy Gold or Silver: The Ultimate Guide

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3 thoughts on “Does Record Low Gold Volatility and Sentiment Mean Time to Buy?

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