The coronavirus crisis has forced many gold refineries to shut down completely or reduce their output significantly. Slowly but surely, things are returning to normal, at least in Switzerland.
Swiss Gold Refineries Reopen
It has been coming for some time now, but some of the world’s biggest gold refineries are resuming their business operations. This will make a very big impact on the global production of gold, as that had ground to a virtual standstill.
In Switzerland, Valcambi and Argor-Heraeus are preparing to resume their normal business operations once again. That news is remarkable for many reasons, especially at this stage of the coronavirus crisis.
First of all, experts believed that the majority of gold refineries would remain under lockdown until the summer. That has not come to pass after all, although the situation in Switzerland is not necessarily a precedent for the rest of the world.
Secondly, Valcambi and Argor-Heraeus are two of the world’s largest gold refineries. That makes their decision all the more important for other players active in this industry. If their production returns to normal, the supply chain issues for most gold markets may be resolved sooner rather than later.
Health and safety measures will still remain in place for the foreseeable future. The coronavirus pandemic is far from subdued, yet the situation appears manageable in this part of Switzerland. Argor will divide its staff into three separate shifts to reduce the number of people working in close proximity to one another.
What Will Happen to the Gold Price?
For an asset that is primarily heralded for its scarcity, gold appeared to be in a very intriguing situation. With refineries shut down globally, many expected this to influence the gold price in a spectacular manner. So far, that has not happened, although things can always change for the better.
Valcambi and Argor process roughly 1,500 tonnes of gold on a yearly basis. When looking at the global supply per annum, that represents near 33%. It is important to note that Valcambi will not operate at full capacity right away. Instead, they will ramp up operations to nearly 85% of normal production.
In terms of gold price predictions, it remains to be seen what the future will hold. The gold price has been suffering from some bearish pressure last week, yet the expectations for a new all-time high gold price remain in place. The $3,000 target outlined by Bank of America analysts may prove to be attainable after all.