Industry lobby group World Gold Council said Tuesday it had launched its new consumer research report highlighting opportunities for gold for those working in the retail investment and jewelry markets.
The research report surveyed 18,000 people to understand the attitudes how and why people buy gold, and also their reasons for not buying across a range of markets including China, Germany, India, Russia and North America.
The WGC said the research “reveals gold is a mainstream choice — the third most consistently bought investment, with 46% of global retail investors choosing gold products, which is just behind saving accounts (78%) and life insurance (54%).”
Looking at jewelry, the report said that 56% of consumers have bought fine gold jewelry, compared to 34% who have bought platinum jewelry.
Additionally, the survey said that more than a third (38%) of retail investors and fashion enthusiasts have never bought gold but are warm to the idea.
According to the WGC, this shows “a huge potential for the gold market to grow if untapped sources of demand can be converted.”
The report said that two-thirds (67%) of all retail investors “believe that gold is a good safeguard against both inflation and currency fluctuations, and 61% trust gold more than fiat currencies.”
The Council said “the industry should build on that confidence, while staying alert to areas where it is weaker.”
AREAS OF MISTRUST
The WGC said there is some mistrust among those that have never bought gold but consider purchasing the metal in the future, “with 48% and 28% of all potential investment and jewelry consumers respectively naming lack of trust as a major barrier.”
“That could be mistrust around fake or counterfeit bars and coins, product purity, or the trustworthiness of some retailers,” the WGC said.
The report said the precious metal can resonate more deeply among younger consumers.
“Millennials’ attitudes towards gold are not so different to those of older generations,” it said. “But there are perceptual misgivings among the younger Gen Z audience, misgivings which are particularly pronounced in China’s jewelry market.”
The report said, citing an example, 40% of 18-24 fashion buyers in China agree that gold can bring good luck compared with 88% for those aged between 55 and 65.
TECH INNOVATIONS FOR AUDIENCES
The report said technological innovation can create a route to new audiences.
“We know there are some pioneering, tech-savvy players in the gold market,” the Council said. “But our data suggests there are too few.”
“Gold compares poorly to other retail investments and fashion items when looked at through the lens of digital distribution, marketing and communications,” it said. “Global retail investors only buy 9% of gold coins and 6% of jewelry online, compared with 25% of gold-backed exchange-traded funds (ETFs).”
The WGC concluded that in the minds of potential gold buyers “there are knowledge gaps” that need to be filled with “two thirds (66%) of potential gold consumers globally say they lack the necessary knowledge to buy gold.”
ETFs hitting highs in Nov
Last week, exchange-traded fund gold holdings hit a fresh all-time high of 2,855.3 mt in the third quarter, offsetting slack demand from other sectors to push global demand up a modest 3% year on year.
The WGC said that demand had “nudged” higher, propped up by ETF demand, as jewelry and physical buying felt thepressure of the higher outright price.
Gold is trading around $1,450/oz, after hovering above $1,500/oz at the beginning of the month, having hit a year-to-date high of $1,546.10/oz September 4.
— Filip Warwick, firstname.lastname@example.org
— Edited by Jonathan Dart, email@example.com