ZURICH, March 24 (Reuters) - Gold dealers in Switzerland are rushing to keep up with a surge in demand as worried investors seek out lower risk investments in precious metals with financial markets roiled by the coronavirus pandemic.
Some sellers are seeing a ten-fold increase in sales of gold bars, coins and other pieces as existing buyers increase their holdings and newcomers enter the market.
Banks too are seeing a sharp rise in demand for other precious metals, including silver, as well as smaller investments like 20 or 50 gram gold combibars which look like credit cards and can be divided into 20 or 50 squares.
“The physical demand for gold at Zuercher Kantonalbank is currently enormous. All available products — bars, coins, etc — are in demand,” said a spokesman for the bank.
“The high demand for silver bars is also astonishing.”
The price of gold had been steadily increasing since the start of the year but was briefly knocked lower as investors scrambled for cash to meet margin calls in other markets as the coronavirus outbreak spread.
However, it has surged since March 19, gaining nearly 10% in less than a week.
Retailers have extended opening times and also tried to take on extra staff to deal with the rising demand, which is being channeled online as shops are shuttered on government orders to contain the virus.
“We are in principle completely sold out. You can already say that,” said Philipp Bachofen, from Geiger Edelmetalle in St. Margrethen, close to the border with Austria.
“In the last few weeks, it’s all about getting gold,” he said, adding there were many smaller customers buying smaller bars while the bigger customers tended to favour 250 gram bars.
Supply has tightened as gold refineries in Switzerland reduce production.
“This has brought additional stresses to the system,” said Andreas Habluetzel, CEO of precious metals retailer Degussa Goldhandel.
“For us, the demand increased tenfold last week, but we have a stock of several thousand bars,” he said. “So I expect we will be the last to go out of business.”
Online retailer Gold Avenue has already received more orders in March than in the whole of the last quarter of 2019.
“We need to recruit new people to meet the new demand, and that’s challenging because everyone is working from home,” Chief Executive Alessandro Soldati told Reuters.
“An increasing amount of people are interested in buying precious metals. People want to buy physical assets they can touch.” Gold has been seen throughout human history as a safe place to save money, Soldati said.
“Everyone expects the price of gold to increase in the next few weeks. I cannot predict what will happen and I can’t give financial advice, but I’m buying more gold myself, and so is my family and my girlfriend.” (Additonal reporting by John Miller and Oliver Hirt, writing by John Revill; Editing by Kirsten Donovan)