Written by Mark Yaxley, General Manager, Strategic Wealth Preservation.
This week was a continuation of the ‘new normal’, which is anything but normal. COVID continues to complicate our work and personal lives, including the precious metals supply chain. I’ll start there.
Supply Chain Disruption
Back on March 20th, the Royal Canadian Mint, North America’s second largest producer, announced a two week production halt of their beloved Maple Leaf products and other best sellers. Members of industry now wait with bated breath to see if they will resume production come Monday. During the same time period, many Swiss refineries announced their shutdowns as well.
This week several key gold and silver-focused mining operations in Mexico announced their closures amongst concerns for their workers safety.
FedEx is also limiting its deliveries in some jurisdictions to essential cargo, including food and medical equipment, throwing yet another wrench in the spokes of an industry that is experiencing record demand for physical products on heavy safe haven buying.
The bottom line is, that the flow of precious metals is strained at the moment, and my personal expectation is that this trend will continue for the foreseeable future.
Price Action
Gold and silver prices were relatively flat this week, despite horrid job data and GDP projections in the United States, and other countries. Retail demand for the shiny stuff remains strong, however sales are beginning to be impacted by the unavailability of some best selling, smaller format products that retail investors are used to buying.
Product Availability
No significant change here to report. Product availability remains tight and intermittent. As soon as some inventory of best selling product becomes available, it is quickly consumed. Most suppliers are accepting pre-orders and delivering within 4-8 weeks.
Secondary suppliers of private label products have stepped in to fill the void left by the major producers, but their production capacity is limited and remains subject to the availability of gold and silver grain, or refined material, which is also back-logged.
Premiums
Premiums remain very high and are creeping up daily. My only advice here is:
#1. If you are considering buying, do so sooner than later.
#2. Please contact our experienced traders for assistance in selecting the best available products.
Mark Yaxley
Email – my@swpcayman.com
Twitter – @SWPGold
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Mark Yaxley is the General Manager for Strategic Wealth Preservation (SWP), a premier offshore precious metals dealer and storage facility located in in the Cayman Islands. Following the completion of his studies at McGill University, Mark joined world-renowned Kitco Metals, serving as their Product Development Manager and Product Marketing Manager from 2006 to 2013. Mark joined Strategic Wealth Preservation in 2014, focusing on the diverse needs of SWP’s high-net-worth clients. He can be reached at my@swpcayman.com
This article was originally posted in the Strategic Wealth Preservation Blog and copied here with the permission of the author.