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Research - 07.05.2020 - 00:00

2020 Precious Metal Atlas

In the corona crisis, many Swiss people are relying on gold as a “safe currency”. The raw material is further gaining ground as an investment alternative: since the beginning of the year, the price of gold has risen by more than 12%. Private Swiss investments amount to 920 tonnes of gold in the value of CHF 48bn. This is revealed by the latest survey conducted by the Institute of Retail Management of the University of St.Gallen (IRM-HSG). The survey was again supported by the precious metal trader philoro Schweiz AG.

7 May 2020. The study reveals that interviewees who feel threatened by the corona crisis consider precious metals to be more sensible as investments than those who are hardly threatened by the virus at all. Also, the former invested in precious metals in the past in 27% of the cases. Among people with a slight subjective perception of threat, this value amounts to only 22.4%. Surprisingly, the intention to invest in precious metals in the future is almost the same in both groups. The reason for this is the fact that precious metals have been highly popular for years, independently of the corona crisis. Private investors in Switzerland primarily buy precious metals as a long-term investment (1st place), because of their security (2nd place) and because of their stability (3rd place). When consumers feel greatly threatened by the virus, they rate provisions made for the crisis as more important than value preservation. Thus precious metals are acquired as “reserves in times of crisis”.

Gold is increasing in popularity

In comparison with 2019, gold has been gaining ground as a preferred form of investment: 50% of the interviewees prefer to invest their money in gold. Only real estate registers a slightly higher value at 50.4%. They are followed by shares (27% of all interviewees), investment funds (26%) and current and savings accounts (22%). Gold is particularly popular with men. 55% of them indicate that they prefer gold to all other forms of investment. Also, interviewees in Italian-speaking Switzerland tend to prefer gold (52%) to real estate (47%). Interviewees in German- and French-speaking Switzerland, however, prefer real estate to gold by a wide margin.

In comparison with the time of the last survey in 2019, more and more consumers regard precious metals as a sensible investment option: by now, almost two thirds of the interviewees (65.2%) do so; an increase of approx. 5%. One in five considers it likely (20.5%) that they will invest in precious metals in the next twelve months.

One in four interviewees has already invested in precious metals (25.5%) and one in five even in physical gold (21.9%). According to the results of this survey, private Swiss investors own gold in a total amount of CHF 48bn. In 2019 alone, they invested CHF 1.42bn in gold. With reference to 2019, this amounted to 11.6% of the savings which were spent on gold purchases.

Digital precious metal traders are becoming more popular

Most consumers prefer to buy precious metals through their principal bank (63.3%). Precious metal traders with a stationary business are the runners-up (16.0%), followed by online precious metal traders (9.5%) and other banks (not the principal bank; 8.6%). Thus online precious metal traders have been able to catch up in comparison with 2019 and have squeezed out other banks from third to fourth place.

For the survey, 2,300 adults from German-, French- and Italian-speaking Switzerland were asked questions about their attitudes towards physical precious metals. The survey was jointly conducted by Kathrin Neumüller, member of the research staff and doctoral student at the University of St.Gallen, and Prof. Dr. Thomas Rudolph, Director of the Institute of Retail Management (IRM-HSG). The survey was supported by philoro Schweiz AG, a globally operating precious metal trader.

Image: Adobe Stock / Björn Wylezich

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