The recovery in the gold sales market continues. According to forecasts from Mennica Skarbowa’s experts, in the upcoming months, sales of gold products can be expected to increase by several percent compared to last year. One of the important trends that will contribute to it is the growing interest of Poles in small gold weights, especially in the online sales channel. The price of gold is also not expected to decrease, and this is due, among other things, to the rising cost of gold mining. As Adam Stroniawski, Managing Director of Sales at Mennica Skarbowa, admits, customers are increasingly interested in easy access to investment products, which results in an increase in demand for small gold units, particularly those chosen as gifts.
Sales of gold investment products fell significantly across Europe last year. Germany alone saw a 70% reduction in demand for bullion products. The following also occurred in Poland last year, 40-50% fewer gold investment products were sold in Poland compared to 2022. According to Mennica Skarbowa estimates, there could be a several percent increase in gold sales this year compared to 2023. One important trend that could contribute to the increase in demand is the growing interest among Poles in small gold weights, especially in the online sales channel. Customers are now increasingly keen on easy access to investment products, which translates into an escalating demand for several-gram gold bars and lower-value coins.
It has been observed that years of pandemics have changed the purchasing preferences of Poles, accustoming us to online shopping. In particular, it is noticeable when customers purchase bullion for a gift. Then, they don’t need a visit to a branch, counseling or live product viewing. What matters to them is the availability of the coin or bar and the low cost of efficient delivery.
Consolidation of companies will proceed
Analyzing the situation on the Polish market, one can come to the conclusion that in the near future the industry will witness many consolidations. The merging of companies or the collapse of smaller brokers will soon be increasingly seen in Polish daily life. This is due to lower revenues and changing market conditions. It is already observed that small companies and companies that have not made the desired profits in 2020-2022 have become unprofitable and are looking for beneficial solutions. Therefore, consumers should be even more aware of where they are shopping to avoid the potential unpleasantness associated with the instability of certain entities in the market.
Gold price and an outlook for the coming months
Until a year ago, we could buy an ounce of gold for about $1,824. Over the course of the year, it has become more than $200 more expensive. At this point, there is no reason for a significant price correction. In the first week of March this year, the price of gold reached a historic peak of $2,200 per ounce, opening the door to potentially large market movements. Gold has been trading higher and higher since last year, and upcoming macroeconomic events could further boost its price. Concerns about the global economic outlook, geopolitical tensions and changing expectations of early FED interest rate cuts are steadily driving increased demand. The cost of buying bullion is expected to remain about the same or reach only a slightly higher ceiling than today in the near term. Last year, as estimated by Mennica Skarbowa, 40-50% fewer gold investment products were sold in Poland than in 2022. 2024 should be a better year for the industry. We see a good chance for the market to return to the sales growth rate from before the Covid-19 pandemic. Increasingly expensive real estate and falling deposit rates on the one hand, and active gold accumulation by central banks on the other, mean that there is a good chance for a significant increase in consumer interest in gold and silver. If we look at the statistics, we see that only 14% of the Polish population has ever bought gold. This shows that only a small group of Poles have so far recognized the profitability of investing in gold. It is believed that this may soon change, especially since Poles are increasingly buying gold as gifts for their loved ones, e.g. for a holy communion or wedding.