German demand for gold in the form of gold bars and gold coins reached a new 3-month high in the third quarter of 2022. This was announced by the World Gold Council (WGC) in its recent report on the gold market for the third quarter of this year.
Demand for gold in the fourth quarter of 2008, that is, immediately after the bankruptcy of the American bank Lehman Brothers and with the onset of the global financial crisis, still remains unsurpassed. After all, at that time, according to the WGC, 71 tons of gold worth 2.28 billion euros were sold in Germany in three months. For comparison: in the first three quarters of 2008, the total volume was 43 tons of gold.
In the first quarter of 2009 followed by the second strongest three-month period - also unparalleled so far - with a demand of 59 tons of gold worth 1.9 billion euros. The calculation is based on the average gold price for the corresponding three-month period (London fixing).
In subsequent quarters, the demand for gold declined significantly. However, this was also due to the shortage of the yellow precious metal. Many precious metal shops were practically empty at that time. And this situation then repeated itself several times later, namely: during the years of the Eurocrisis (until 2012), then during the coronavirus crisis, and until recently also after the start of a full-scale military invasion by Russia into Ukraine.
Since the end of 2019, that is, with the beginning of the corona crisis, there has been a consistently high demand for gold in Germany. This is due to the fact that for almost twelve quarters it exceeds one billion euros. And over time, huge amounts of investment have accumulated.
In addition, in Germany in past years, silver in the form of bars and coins was in great demand. However, this business accounts for less than 10% of gold demand.
Why Germany?
German investors are traditionally among the world's largest buyers of gold. In the third quarter of 2022, Germany ranked fourth in the investment gold category according to the World Gold Council, behind only China, Turkey and India.
The images of hyperinflation during the Weimar Republic from 1914 to 1923 are deeply imprinted in the minds of the Germans. Almost everyone knows photos from school textbooks, which show people carrying stacks of paper banknotes in carts through the streets of the city or stoking stoves with stacks of money. The maximum monthly inflation rate at that time was 32.400%. Gold represents the ultimate defense against demonetization, and perhaps that is why it is so sought after by the Germans at the present time.