Fearing inflation, Germans load up on gold bars
BERLIN – Many gold investors might be fretting over the prospect of the Federal Reserve curbing monetary stimulus, but Germans are still loading up.
Demand for physical bullion in Germany, traditionally the biggest coin and bar buyer in Europe, was the highest since at least 2009 in the first half, World Gold Council data shows.
While purchases in other Western markets have also been strong, Germans in particular are pouring into the metal as a hedge against rising inflation – and dealers say business remains good.
“We have a long history of inflation fear in our DNA. Now the inflation risk is picking up,” said Raphael Scherer, a managing director at metals dealer Philoro Edelmetalle GmbH, whose gold sales are up 25 percent on what was already a strong 2020. “The outlook for precious
metals is very positive.” Germany’s love of gold has its origins in the hyperinflation seen under the Weimar Republic a century ago, which saw consumers’ buying power collapse. Last month, the reopening of the economy helped German inflation jump to the highest in more than a decade. Negative interest rates in Europe are also making non-yielding assets like gold more
attractive, Scherer said. Germany’s far-right AfD has sought to use rising inflation to boost its support ahead of the September 26 national election. The anti- immigrant party accuses the European Central Bank of “dispossessing” Germans of their savings with its “reprehensible
zero-rate policy.”
The party’s warning was
echoed in June by Bild newspaper, Germany’s biggest-selling tabloid. – BLOOMBERG NEW
