It may be a sign they are worried about the future. People tend to buy gold when they fear economic disaster or a spike in prices.
The World Gold Council report released on Thursday said demand for total gold bar and coins spiked by 20% in Germany during the first quarter from the year before.
It’s unusual for gold to be a hot commodity in an economy as strong Germany’s is right now. And growth in Europe has regained momentum in recent months, outpacing even the sluggish pace experienced in the U.S.
Here is what’s driving the European gold rush:
Inflation fears: The sale of gold has surged as the European Central Bank embarked on an experiment aimed at purchasing at least $1.3 trillion of bonds.
Some German citizens appear to be worried about a spike in prices triggered by so-called central bank money printing.
“You’re talking about a group of people who have been burned before by governments overprinting currency. They’ve been through hyperinflation back in the 1920s,” said Van Simmons, a buyer and seller of gold coins who is president of David Hall Rare Coins.
The World Gold Council said the first three months of 2015 represented the strongest start to a year for European gold demand since 2011 — the year of the sovereign debt crisis that threatened to tear the eurozone apart.
Not only are people in Europe expressing concern about the ECB’s stimulus programs backfiring, but they also seem to be fretting about the never-ending Greek crisis and lingering tensions with Russia over Ukraine.
Full article: Germans are buying gold at a frantic pace. (CNN Money)