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Gold Follows Silver Into Supply Shortage

Gold out of stock

I checked last night on several popular retail sites for gold coins, including American Eagles, Canadian Maple Leafs, and South African Krugerrands. APMEX, SDBullion, and JM Bullion are all but sold out of these popular 1 oz gold coins and gold bars. As of this morning, APMEX had less than 10, prior dated 1986 and 1988, American Eagle coins in stock, having only 1 of one and 6 of the other. I fully expect those to be sold out by the time you get this article in your inbox today, March 23, 2020.

The only gold coins and bars that I am seeing available in any quantity is numismatic gold and silver coins, meaning you will have some markup over spot to account for rarity and coin quality. I am not sure when gold will become available again, but it may be awhile. Due to the coronavirus, Egon Von Greyerz of Gold Switzerland is reporting that several gold refiners are closing their doors. I have not received confirmation of this from any local Swiss news sources, but will keep you updated as I am able to find out more.

Update: The Financial Post confirms three refineries are being shut down.

In addition, Peru and Ecuador operators are closing mines to halt the spread of the virus.

Finally, the Royal Canadian mint is shutting its doors temporarily.

Argor, Valcambi, and PAMP have been shuttered, due to the Ticino Canton of Switzerland, closest canton to Italy, ordering suspension of gold refining through the end of March. The order is expected to be extended as Italy continues to be ravaged by the coronavirus.

Swiss Canton of Ticino

Image Courtesy of Wikipedia

70% of gold refining occurs in Switzerland. If this shutdown continues, and spreads to other Swiss refiners, then we may have a gold shortage for some period of time. This is already bullish for gold as premiums have risen for pre-sale bars and coins on various retail sites. Dependent on whether the coronavirus causes a financial meltdown (and not just a stock market crash), which I fully expect it to, gold price premiums could skyrocket as supply far outpaces available physical demand.

It is quite possible that if you had not gotten your physical gold and silver already, the window for doing so at current market prices has passed. Physical supply may only come available once the price pushes closer to the previous peak of $1900, and then perhaps only in limited quantities. We will have to see what happens next.

Your only other option may be 24k gold jewelry, which you can pickup in two places that I know of:  Mene and GoldSilver.com. Mene typically has smaller markups at between 20-30% over spot, but those percentages may start to climb as coin and bar demand quickly shifts over to jewelry.