In Switzerland gold dealers are working hard and fast to keep up with a high demand of gold. Concerned investors are seeking out lower risk investments in precious metals due to financial markets dropping by the coronavirus pandemic.
Some gold dealers are selling their products at a ten-fold increase, products including the sale of gold bars, coins and other pieces made of gold. Dealers selling to existing buyers increased their holdings while newcomers also entered the market.
Apart from dealers, banks are also seeing a sharp increase in demand for other precious metals. Metals such as silver and smaller investments like 20 or 50 gram gold combibars, which look and are about the size of a credit card. Combibars can be divided into 20 or 50 squares.
A spokesman for the bank stated “The physical demand for gold at Zuercher Kantonalbank is currently enormous. All available products — bars, coins, etc — are in demand. The high demand for silver bars is also astonishing.”
From the start of the year, the price of gold had steadily been increasing. However it was briefly knocked down due to investors scrambling for cash to meet margin calls in other markets as the coronavirus outbreak began to spread.
Since March 19, it has risen, increasing nearly 10% in less than a week.
Gold dealers are extending their opening hours and also trying to hire extra staff in order to be able to handle the rise in demand. Most purchases are being channeled online as shops are shut down due to government orders to contain the virus.
Philipp Bachofen, from Geiger Edelmetalle in St. Margrethen, close to the border with Austria, said “We are in principle completely sold out. You can already say that. In the last few weeks, it’s all about getting gold,” Also adding there have been many small purchase customers buying smaller bars and bigger purchase customers buying 250 gram bars.
Switzerland is reducing production in it’s gold refineries as supplies tighten.
Andreas Habluetzel, CEO of precious metals retailer Degussa Goldhandel has said “This has brought additional stresses to the system,”
“For us, the demand increased tenfold last week, but we have a stock of several thousand bars, so I expect we will be the last to go out of business.”
Gold Avenue, an online retailer has already received more orders in March than the entire last quarter of 2019.
Chief Executive Alessandro Soldati said in an interview with Reuters. “We need to recruit new people to meet the new demand, and that’s challenging because everyone is working from home,”
“An increasing amount of people are interested in buying precious metals. People want to buy physical assets they can touch.” Soldati also noted that throughout human history gold has been seen as a safe place to save money.
He finished by stating “Everyone expects the price of gold to increase in the next few weeks. I cannot predict what will happen and I can’t give financial advice, but I’m buying more gold myself, and so is my family and my girlfriend.”
With Coronavirus causing an economic frenzy, gold is no different. People are rushing to buy as much as they can.
Author bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated Gold & Precious Metals Merchant provider in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.