Quick Market Update: Global Run on Physical Gold Already Tightening Supplies
Zero interest on US Dollar, extreme money supply in the US, overrated stock markets and the fear for an increasing recession and of the Coronavirus caused a crazy run on physical gold as we have not seen it before.
The US mint announced that they can not supply some of their coins and only smaller quantities of their other coins. Retail gold sellers in Germany and other European countries saw an increase of sales of 50 to 60%, compared with March 2019.
Gold premiums went up substantially in Asian markets and are expected to rise in European markets as well.
We witnessed an increase in sales of around 50% during the last 3 weeks. Increased demand is coming especially from large clients, buying gold for up to double million digits. Increase in new client applications is 100%.
Situation of Gold:
Buyers and the market in general fear a closure of the borders of Switzerland, as it is one of the countries hit hardest by the Coronavirus. The precious metal refineries in Switzerland mostly employ commuting workers from Italy and from France, who then would not be able to come to work anymore.
In that case, Swiss refineries would have to reduce their production drastically, if not to closing down completely. Consequently, gold could only be provided from secondary markets, which would increase gold premiums substantially.
GOLD UPDATES 24 March 2020:
- The three main refineries for precious metals in Switzerland are now closed.
- The Royal Mint of Canada closed to protect its workers.
- Dubai will prohibit export of gold from tomorrow (Wednesday, 25 March 2020)
- Gold price passed USD/oz 1.600 today.
However, we are still able to deliver for the time being:
- 1.000 g fine gold bars 999,9, primary market, directly from Swiss refineries
- 100 g fine gold bars 999,9, primary market, directly from Swiss refineries
Price fixing upon arrival of client transfer on our bank accounts in Liechtenstein; delivery and storage in our high-security vaults in Liechtenstein around end of March 2020. Fixing with price limit order is possible.
At the time being we are ordering from the Swiss refineries gold for several millions on a daily basis.
Unlike many other gold sellers in other countries, our premium on gold increased only marginally. The marginal increase is caused by drastically increased transport insurance fees, due to the inclusion of virus contamination risks.
Situation of Silver:
Silver Standard bars (31,1 kg) are not available at the moment as Mexico stopped its exports, due to the crazy situation in the world (volatility of markets etc.). The government of Mexico prefers to hoard their national wealth.
1 kg silver bars are available, but the premium is too expensive at the moment to our opinion. Still, people do buy.
The silver price tumbled because of mass sales of future contracts by investors (speculators) who believe in a steep fall of demand for silver, as silver is mainly used in the industry (recession because of coronavirus and of other global market issues).
SILVER UPDATES 24 March 2020:
- Many silver mines around the world have been closed.
- The closure of the three main refineries for precious metals in Switzerland does effect silver supply negatively.
This will, contrary to what we wrote above, increase the demand in silver. - 1 kg silver bars are not available at the moment in larger quantities and they also cannot be ordered.#
- Premium on Silver Standard bars went up to 27% in Singapore
- But we are now able again to sell and store Silver Standard bars (31,1 kg)! Supply changes continuously, please ask us for current availability. Our premium is only at about 15% at the moment.
We do not offer investment advice:
This information is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, or as investment advice in general.
