Gold zoomed through fresh record highs on Wednesday. See this chart:
And it’s largely thanks to unprecedented demand stemming from Germany and Austria on the day. Or so we are told.
As Ed Tuly, a gold analyst at UBS, wrote:
Our Zurich and Geneva sales desks remain exceptionally busy coping with this heightened retail demand for coins and small bars, mostly out of Europe and in particular out of Germany.
(H/T to Javier Blas, the FT’s commodities correspondent.)
The FT, meanwhile, offered the following context:
Traders and coin dealers said buying was exceptionally strong from German and Swiss investors. In Frankfurt, gold sellers said that demand late last week was three to four times normal levels. The spike appears to reflect concerns in Germany about the potential inflationary impact of the European Central Bank’s decision to buy up eurozone government bonds in the wake of the Greek debt crisis.
Michael Kramer, president of Manfra, Tordella & Brookes, a large New York-based coin dealership, said: “The demand has been huge overseas. Most of it is ending up in Germany.” Edel Tully, precious metals strategist at UBS in London, added: “Coin demand is so intense that supply is struggling to match”.
Reports were also circulating via Twitter that German online bullion websites had nearly run out of gold coin supplies, and that some websites had suspended or restricted services.
This, for example, was the note (via Google Translate) on one German gold trader’s – www.silberundgoldshop.de–website:
Important Notice!
Given the current massive demand for precious metals trader of all kinds are the most leergekauft complete. According to our information, are also the first manufacturer and the production of precious metals Mints first one (Heraeus, Umicore, South Africa …). Thus the stage is similar to the current situation in October 2008. We will, as then, continue to receive orders.Restrict us in again but mostly on our contacts in the gold bullion and silver bullion gold range of Emirates Dubai to remain able to deliver to. Note here that it high Maximum number of orders for delivery 7-10 working days can get the result. As long as it works, we are also gold coins and silver coins range in the lead. We offer these but mainly in the retail shop at.
Paul Tustain, Director of BullionVault — a UK-based supplier which deals in Germany — told FT Alphaville he was seeing volumes running at about 300 per cent of normal. He also confirmed that he’d seen strong demand from Germany.
Overall, though, Tustain said demand was still about 80 per cent of what it was around the days of the Lehman bankruptcy.
A good time to stock up on the Goldschläger, perhaps?
Related links:
How Much Gold is there in Goldschlager? – Darrenbarefoot.com
In fiat money we do not trust - FT Alphaville