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Gold sparkles under virus shadow

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A merchant displays gold crafts at a gold market in Gaza City, July 8, 2019. (Str/Xinhua)

AFP – Gold, prized by investors in times of crisis as a haven, is experiencing surging demand in the face of the Coronavirus outbreak – from both commodity traders and retail buyers.

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The precious metal had forged a seven-year peak on commodity markets this month as traders sought shelter from the COVID-19 pandemic and its destructive economic impact.

The commodity has also rocketed as investors seek to guard against rising inflation – with many central banks injecting immense amounts of liquidity into the financial system to counter virus fallout.

“The phone has not stopped ringing” because “demand has exploded”, said Alessandro Soldati, boss of Gold Avenue, the online retail arm of Swiss refiner and ingots producer MKS PAMP Group.

Over the last three weeks, as the new coronavirus strain spread across the globe, Gold Avenue experienced more sales than during the entire final quarter of last year.

With most orders placed online, Gold Avenue has “all the tools” to help meet the rapid growth in demand, according to its chairman Omar Liess.

Some companies are encountering some issues meeting the sheer volume of demand.

But the main problem is logistical – because so many flights are cancelled because of the oronavirus outbreak.

Customers still however have the option of keeping their gold coins and bars in safes – because trading companies usually offer such storage solutions.

And if they do want to take physical delivery of the glamorous precious metal, then customers face the prospect of a long wait.

US-based online precious metal retailer JM Bullion has warned its customers to expect delays of more than 15 days as a result of “extreme order volumes”.

Gold had already soared in value in the London Bullion Market to reach a December 2012 peak of $1,703.39 per ounce on March 9.

It has since fallen on modest profit-taking but remains at an elevated level of about $1,600.

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