Traders have reported an increasing global shortage of gold bars, as the coronavirus pandemic disrupts both the supply and stokes demand.
Retail investors in Europe and the US have bought up gold, silver bars and coins over the past two weeks to protect their money from the collapse in global stock prices and many currencies.
However, Europe’s largest gold refineries have struggled to keep afloat because of the region’s widening shutdown. Valcambi, Pamp and Argor-Heraeus are all based in the Swiss region of Ticino, near the border with Italy.
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Local authorities announced in recent days that production in the area was to be stopped temporarily.
On March 9 the price of gold hit a seven-year high of more than $1,700 a troy ounce as the deepening economic impact of the coronavirus outbreak sent investors chasing haven assets. But gold has since gone down to about $1,530 on Monday afternoon, March 23.
Retail demand for physical gold bars has surged. Retailers have already reported shortages and delays of up to 15 days on shipments. Markus Krall, chief executive of German precious metals retailer Degussa, said it was struggling to meet customer appetite for gold bars and coins and had to turn to the wholesale markets.
Ken Lewis, chief executive of Apmex, a US precious-metals retailer, said in the past week that the “product has become increasingly difficult to source as the market becomes more volatile day by day”. The company said it had purchased more than a million ounces of silver grain and bars, more than 20,000 American Gold Eagles coins and thousands of gold bars.
JM Bullion, another US-based precious metals retailer, said customer orders would be delayed by 15 days and introduced a minimum order size.
BullionStar, a Singapore-based precious metals retailer, said it was paying a premium to buy back silver and gold coins from customers in an effort to replenish supplies, according to Ronan Manly, one of its analysts.