Gold And Silver Bullion Coin And Bar Shortages Continue

Gold And Silver Bullion Coin And Bar Shortages Continue

Today’s AM fix was USD 1,476.50, EUR 1,124.95 and GBP 949.34 per ounce.
Yesterday’s AM fix was USD 1,456.00, EUR 1,106.22 and GBP 935.07 per ounce.

Gold rose $8.10 or 0.56% yesterday to $1,466.80/oz and silver finished + 0.68%.

Physical demand for coins and bars internationally continues and is the strongest since the immediate aftermath of the Lehman Brothers collapse on September 15, 2008, and the consequent global financial crisis.

Government mints, refiners and bullion dealers internationally are reporting demand as high as in the aftermath of the Lehman crisis.
GoldCore Market Performance Table

Brokerages are seeing nearly all buyers and little or no sellers which is making for a tight market with rising premiums. At GoldCore, sellers have been people liquidating unallocated positions and opting for taking physical possession or the increased safety of allocated accounts.

Higher prices will be needed by bullion owners in order to incentivise them to sell – prices that will likely be significantly higher.

Most physical owners are buying for the long term and will not sell in the coming months even when prices recover. If prices rise to back above $1,600/oz, some physical gold might come back into the market and alleviate the supply issues.
Gold in Euros, 1 Year – (Bloomberg)
Gold in Euros, 1 Year – (Bloomberg)

However, we believe that this may be a long term structural supply demand issue in what is a very small physical bullion market, that will only be alleviated by much higher prices and indeed higher premiums.

It is difficult to generalise regarding premiums as there are so many products and so many regions but in general terms, prices on nearly all small coins and bars are rising and on average there have been 1% to 2% rises in the premiums on popular one ounce gold coins and bars. This means that one ounce coins and bars can cost some $14 to $28 more than they did prior to the price falls.

The percentage increase in premiums in the silver market is even higher and there are more delays and unavailability of silver coins and bars with popular formats such as Eagles and Maples now almost difficult to secure. We acquired a large number of Silver Eagle Monster Boxes yesterday which we expect to have sold by the close today.

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