Private gold investors less bearish than funds in Feb -survey

Tue Mar 5, 2013 8:59am GMT

* Retail sentiment index eases despite selloff-BullionVault

* Readings stand in contrast to heavy gold ETF outflows

* BullionVault's gold holdings unchanged in Feb. vs Jan.

NEW YORK, March 5 (Reuters) - Private investors added physical gold following the metal's heavy selloff late in February, underpinning a market hit hard by heavy fund liquidation last month, a survey by BullionVault showed on Tuesday.

London-based BullionVault, an online physical gold and silver market for individual investors, said its Gold Investor Index dipped to 54.4 in February from 54.9 in January. February's figure marked the lowest reading since September 2012.

A number above 50 indicates more buyers than sellers. While net buying by the firm's mostly buy-and-hold type customers is seen as bullish, net selling might suggest individual retail investors are exiting the gold trade.

The survey stood in sharp contrast to unprecedented selling by institutional investors in gold-backed exchange-traded funds (ETFs). SPDR Gold Trust, the world's No. 1 gold ETF, finished February with a record monthly outflow of 73.6 tonnes.

"During the rebound, we saw our customers come back to buy, so the public were taking advantage of those real lows and they continued to watch for the dips," said Miguel Perez-Santalla, vice president of BullionVault.

The price of gold fell to a seven-month low near $1,550 an ounce on Feb. 21, hit by talk of hedge fund liquidation and fears the Federal Reserve might halt its stimulus earlier than expected. Gold prices rebounded about 3 percent in the next four sessions after it hit the low.

Perez-Santalla said BullionVault's customers held a total of 32.9 tonnes of gold at the end of February, unchanged compared with its January level.

Rallies in the U.S. equities markets to a near all-time high on a better economic outlook also weighs heavily on safe-haven buying.

Another indicator also suggests individuals were less bearish than institutional investors in February, when bullion prices fell 5 percent for a fifth consecutive monthly drop.

Sales of American Eagle gold coins rose sharply year-on-year in February and silver coin sales posted their strongest performance for the month since 1986. Coins are mostly popular among smaller speculators.

The company said the survey tracks its 45,000 customers in nearly 160 countries.

The index peaked at 71.7 in September 2011 when gold hit an record high of above $1,920 an ounce, while it fell below 50 to 48.8 in February of 2010, BullionVault's data showed.

On Monday, spot gold fell 0.2 percent to $1,572 an ounce on worries about investment demand. (Reporting By Frank Tang. Editing by Andre Grenon)