Gold has been one of the standout performers among commodities in 2024, achieving multiple all-time highs, the latest being last week’s surge above $2,500 per ounce in the futures market. Remarkably, these gains have occurred without significant buying from North American retail investors. However, growing fears of a potential recession, coupled with increased accessibility to bullion products, may soon change this dynamic.
A recent analysis by Finbold reveals a sharp rise in interest in gold investment within the English-speaking world. Between July 31 and pre-market on August 6, searches for “buy gold” on Google Trends soared by 63.93%, reaching a peak interest score of 100. This spike in interest is notably higher than any other time in the reviewed period from May 6 to August 6, 2024, driven primarily by concerns over a looming U.S. recession following a disappointing nonfarm payrolls report.
The analysis highlights that interest in buying gold is especially pronounced in certain U.S. states. Hawaii leads with the highest search interest, followed by Alaska and Wyoming. Other states showing significant interest include West Virginia, Nevada, Washington, New Jersey, Arizona, Missouri, and California. Conversely, states like Vermont, Maine, Montana, South Dakota, and New Hampshire show the least interest.
This surge in retail demand comes in the wake of Monday’s market downturn, which saw $2 trillion wiped from U.S. exchanges. Analysts suggest that the decline in gold prices was largely due to traders liquidating their best-performing assets to cover margin calls on collapsing equity positions. Once the equity markets stabilized, gold prices rebounded above $2,400 per ounce.
Costco’s gold sales provide additional evidence of increasing retail interest. A recent survey by the World Gold Council (WGC) revealed that Costco’s bullion buyers are younger and more diverse than expected, with a preference for gold over cryptocurrencies. The survey, conducted in May 2024, included 4,394 respondents and found that over a quarter had invested in gold in the past five years, making it as popular as stocks but more favored than cryptocurrencies.
Interestingly, 30% of men and 23% of women had invested in gold, with men twice as likely to have invested in crypto. The age group most likely to invest in gold was 25- to 39-year-olds. The survey also indicated that gold investors tend to have broader portfolios, with 36% also investing in cryptocurrencies, compared to 11% of non-gold investors.
Gold investors were found to be wealthier, more educated, and more likely to belong to a minority ethnic group than those who had not invested in gold. The knowledge that Costco sells gold significantly increased interest among respondents, with 41% expressing a greater interest in investing in gold bars in the future.
If the heightened online interest translates into actual retail demand, and if this new demand is met by the easy supply of Costco’s bullion products, the gold market could see a substantial increase in its investor base, particularly if the U.S. economy tilts into recession.
