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Bullion Dealers sold out

Brett Arends's ROI
Opinion: ‘There is no gold.’ Bullion dealers sell out in panic buying

Published: March 25, 2020 at 4:26 p.m. ET
[Image: MW-ID065_arends_20200325154443_ZQ.jpg?uu...8e992d421e] if you're looking for bullion right now you may be out of luck

"If you think gold GC00, -1.457% has jumped about 10% in a couple of days to $1,638 an ounce, the official price quoted on Wall Street, think again.

The real price? Nearer $1,800. If you can get it.

“There’s no gold,” says Josh Strauss, partner at money manager Pekin Hardy Strauss in Chicago (and a bullion fan). “There’s no gold. There’s roughly a 10% premium to purchase physical gold for delivery. Usually it’s like 2%. I can buy a one ounce American Eagle for $1,800,” said Josh Strauss. “$1,800!”

Major gold dealers have sold out of coins and gold bars amid panic buying as the U.S. economy plunges and the government agreed to a record $2 trillion emergency lifeline.

Kitco, the Canadian gold dealing giant, reported Wednesday that it was out of almost all standard one ounce gold coins. American Eagles and Buffaloes, issued by the U.S. Mint, were out of stock, it reported. Ditto Canadian “Maple Leafs,” issued by the Royal Canadian Mint, “Britannias” issued by the Royal Mint of Great Britain, and “Kangaroos” issued by Australia.

It was out of Krugerrands, issued by the South African government. Those are by far the most widely traded gold coins in the world.

Kitco did not immediately return an email for comment.

Read: Gold faces unique pricing, supply and delivery challenges amid COVID-19 shutdowns
“Due to extreme order volumes, please expect shipping delays of 15+ business days,” warned gold dealer JM Bullion.

Giant U.S. dealer Apmex admits Krugerrands are also out of stock. Deliveries of other coins, including Maple Leafs and Eagles, are delayed “due to extreme demand.” And it is charging a hefty premium for physical gold.

For a one ounce American Eagle: $1,788.

Meanwhile, over at the U.S. Mint, customer service reports they have Eagles available but to buy them direct will cost you $2,175. The media relations team could not immediately be reached.

Almost nobody on Wall Street has noticed the full price surge for actual gold bars and coins. That’s because financial traders mostly just deal in paper “contracts” for gold. Those are basically gold IOUs—a mere promise to deliver gold if the buyer ever wants.

Gold is among the most contentious financial topics around. It pits passionate true believers against total skeptics. People get heated and angry on both sides. Some say it is “the only true money.” Others call it little better than an unproductive superstition. The late British economist John Maynard Keynes called the gold standard, which pegged paper currency to the value of gold, a “barbarous relic” of a bygone age...."
Plenty of physical gold available, but not at "spot" prices.

Also, the U.S. Mint does not directly supply normal uncirculated gold coins to the public. What the Mint directly sells are special items made in limited quantities and special finishes, made specifically for collector demand, and these are always priced well above spot (at least 15% to 20% above). The normal quality gold coins made by the U.S. Mint are sold through a chain of private intermediaries so the Mint doesn't have to deal with the hassle of selling small quantities and selling at close/thin premiums. The U.S. Mint typically resets their collector gold coin prices once a week, and they will halt sales if the market is too wild. When someone cites the U.S. Mint sales practices in an article about gold coin sales, it is a sign that the author is lying, or is retarded, or both.

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