The last three weeks’ demand for gold coins and bullion has left dealers’ shelves bare and overwhelmed the supply line.
As stock markets tanked a month ago, investors dumped stocks and stored their money in gold. Prices for coins, bullion, stocks, and futures contracts floated above the markets’ turmoil, with gold’s spot price marking a seven-year high above $1,700 on 9 March.
As equity markets calmed, investors moved their money out of gold funds and back toward stocks and treasury instruments. But as gold fund and futures prices drifted back down, demand for the metal itself kept rising.
Businesses supplying gold can’t meet the demand.
Switzerland’s gold refineries near the Italian border have been shut down because of the virus pandemic.
Precious metals dealers have exhausted retail supplies and are exploring wholesale markets to meet clients’ demands, which are running at as much as five times the normal volume. Some dealers are waiting up to two weeks for shipments that once took a day or two.
“We’re selling as soon as we can get stock,” said Rob Halliday-Stein with Bullion By Post in London. He compared the current market to the clamor for toilet paper.
London’s banks are well-stocked with gold bars, but they’re the 25-pound variety that banks trade among themselves. The one-kilogram bars (about two pounds) that individuals buy can’t be found “in Europe or the U.S. for love nor money,” said trader Ross Norman.
TREND FORECAST: Again, as we have continually forecast, despite volatile gold prices, we maintain that in this unprecedented climate of social fear and economic lockdowns, gold, the ultimate safe-haven asset, will spike well beyond $2,000 per ounce as the “Greatest Depression” deepens and governments and central banks flood the world with cheap money to prop up failing economies.
We also maintain – as evidenced by the speed and intensity of government clampdowns and elimination of personal freedom in the COVID-19 War – as more people flee into gold and away from currencies, the likelihood of “bank holidays” and gold confiscation similar to measures taken in America in 1933, will again be enforced.
