The frenzy to buy physical gold is driving demand for well-known coins like the Krugerrand, Maple Leaf, or American Eagle. A Swiss-issued coin is one of the few still to be had.
The market for physical gold has dried up after four Swiss refineries were forced to shut due to the coronavirus, as finews.asia reported on Tuesday. The market's attention is turning to well-known coins, now available only at a huge premium to the gold or silver price.
The demand is accentuated by state-run mints largely shut down during the pandemic. Experts predict the coin manufacturers won't start up production again before the end of May. Demand for the so-called Goldhans, the colloquial name for legal tender Swiss gold coins, has exploded as a result, finews.asia has learned.
Collectible vs Panic-Buy
The one-ounce coins are 99.99 percent pure gold and traditionally a collector's item. It is the Swiss counterpart to South Africa's Krugerrand, the Canadian Maple Leaf or other official currencies and was launched six years ago as the successor to the «Goldvreneli».
The surge in demand for gold was evident at Zuercher Kantonalbank, which was no longer able to supply physical gold to other regional lenders in Switzerland, a person familiar with the situation told finews.com. A ZKB spokesman said the bank is trying to supply long-standing precious metals clients but is restricting quantities of some offerings due to the demand.
Refinery Suspension
The Swiss bank offers an exchange-traded fund in gold, which the spokesman said the bank has enough metal in reserves to back. «Should refinery production be suspended for a longer period of time, ZKB would not be able to issue any new gold ETFs,» the spokesman said.
The bank's existing ETF remains fully covered with physical gold, he noted. The coronavirus pandemic sent shoppers rushing to hoard toilet paper – but also scrambling for precious metals at Degussa, one of the few places in Zurich to buy physical gold, but now closed. An online service is still available.
