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Gold’s supply squeeze should ease as Swiss refineries reopen

It’s been a turbulent month for gold amid the global health crisis.
Image: Carla Gottgens/Bloomberg

The supply shortages in the gold market will likely ease in the coming weeks as Swiss refineries start running again.

Three major plants in the Swiss canton of Ticino, Europe’s biggest gold-refining hub, have said they’ve received permission from local authorities to run their factories at a limited rate.

The plants were shut for almost two weeks because of the coronavirus outbreak, which cut off a key source of bullion supply and made it harder for some investors to find gold bars. The difficulty of running gold factories and finding flights to ship them to New York and London has rattled the market at a time when investors are desperate to buy gold as a safe-haven asset.

Gold prices have risen to $1 620.81 an ounce, near a seven-year high.

On Sunday, refineries Valcambi SA and Argor-Heraeus SA released statements saying they’ve been granted approval to operate starting on Monday. Another refiner, owned by MKS PAMP Group, made a similar announcement on Friday.

“It is our intention to support the decision of the authorities, guarantee the safety and health of our employees, and at the same time serve our partners as well as possible given the overall extraordinary situation,” said Christoph Wild, chief executive officer of Argor-Heraeus.

While general restrictions in Ticino have been extended into another week, gold refiners said they were granted special permissions.

PAMP and Valcambi will operate at less than 50% of capacity. Argor-Heraeus didn’t specify its production levels, but said it will run at reduced levels.

© 2020 Bloomberg

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What do they want gold for? Can one eat it? Does it cure Corona 19?

As John Pierpont Morgan stated gold is money everything else is credit. When paper currencies goes south your 9 ct chain can keep your family alive to obtain food. The ultimate storer of value throughout the ages. As currencies depreciate that little gold trinket holds value.

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