Largest Gold Refinery in the World Runs out of Krugerrands
Published by Mark O'Byrne at 3:29 pm under Commentary, Gold
Shortages of certain bullion products is possibly the most important issue facing the gold and silver markets today.
The sole maker of South African Krugerrands,
Rand Refinery Ltd., largest gold refinery in the world, today ran out
of the iconic bullion coin after an ‘unusually large’ order from an
unnamed buyer in Switzerland.
Rand Refinery has delivered more than 46m blank coins over the years since it opened in 1967.
[Blockierte Grafik: http://www.gold.ie/images/Krugerrand01.jpg]South African Krugerrand
Bloomberg reported yesterday
how the largest gold refinery in the world was out of inventory of gold
Kruggerands due to just one sizeable order from Switzerland of 5000
Krugerrands. This would be worth a measly $4,160,000 (5000 X $832) and
this shows how small the precious metals markets are vis-à-vis the
bond, equity, currency and derivative markets. It is more than likely
that a tiny fraction of these international capital markets has
realised the supply/demand issues in the physical market and is
following the smart money and this will likely lead to huge moves up in
precious metal prices. This should lead to the inflation adjusted price
of $2,300 per ounce being reached in a matter of weeks rather than a
matter of months and years.
Premiums on nearly all gold and silver bullion products continue to
rise significantly. Some products are actually increasing on a daily
basis. As reported in Bloomberg and Marketwatch (see news) yesterday,
we are now paying a wholesale premium of 3.8% over spot for Krugerrands
in volume, up from 3.2% the day before.
Some of the largest wholesalers in the US have no stock left of
silver bullion coins (Eagles and Maples) and silver bullion bars (1, 10
and 100 ozt) and only have 90% and 40% silver bags. Increasingly there
are delivery delays on a swath of bullion products including on older
European coins including British sovereigns. Some wholesalers are not
just talking about delays of a few weeks but delivery delays into 2009
on certain products.
These shortages are leading to premiums going up sharply on all
bullion products . Some large wholesale bullion dealers have assigned
and appointed a dedicated person to monitor pricing and raise premiums
as required in accordance with lack of supply and rising demand.
Sources:
http://www.thisismoney.co.uk/i…le_id=451213&in_page_id=3
http://www.bloomberg.com/apps/…sarchive&sid=acH4WhPh1WJ0