Traders have reported a growing global shortage of gold bars, as the coronavirus outbreak both disrupts supply and stokes demand, with one business comparing the frenzied buying of the yellow metal with the consumer rush for toilet roll.
Retail investors in Europe and the U.S. have bought up gold and silver bars and coins over the past two weeks in an effort to protect their money from the collapse in global stock prices and many currencies.
But Europe’s largest gold refineries have struggled to keep up 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. Local authorities announced in recent days that production in the area was to be temporarily halted.
The gold price hit a seven-year high on March 9 of more than US$1,700 a troy ounce as the deepening economic impact of the coronavirus outbreak sent investors scurrying for haven assets.
But gold has since been swept up in the selling frenzy, with some investors needing to offload their holdings to free up cash, pushing the price down to about US$1,615 per ounce on Tuesday afternoon.