Gold Dealers Report Big Shortages of Small Bars and Coins

Gold Dealers Report Big Shortages of Small Bars and Coins

By Elena Mazneva on Bloomberg.com

When people are worried about the future they turn to gold to protect their savings. That’s rarely been more true than today.

Surging demand and disruptions from the coronavirus pandemic have created a shortage of the small gold bars most popular with consumers. Those who do manage to get their hands on metal have to pay up –- well above the per-ounce prices being quoted on financial markets in London and New York.

Some dealers are desperately contacting clients to see if anyone is willing to sell their gold bars and coins, and offering a rare premium over spot prices. Others have given up trying to trade altogether.

“People want to buy, not to sell gold,” said Mark O’Byrne, the founder of GoldCore, a dealer based in Dublin. “We have a buyers’ waiting list and we emailed our clients seeing who wished to sell their gold. At this time there is roughly only one or two sellers for every 99 buyers.”

Size is a key reason for the crunch. While there’s plenty of gold in a big trading hub like London, banks and other institutional investors there typically use large bars of 400 ounces. That’s not practical for a regular person who may not want to cough up more than $600,000 for a single bar. Instead, retail investors prefer kilobars (about 32 ounces), 1-ounce bars and coins, or something even smaller.

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