Two Swiss Gold Refiners Begin To Restore ‘Almost All’ Operations After Six Weeks Of Closures

Just in the nick of time!

(by Half Dollar) Just in the nick of time!


From Reuters:

LONDON (Reuters) – Two of the world’s biggest gold refiners, Valcambi and Argor-Heraeus, are restoring almost all operations after Switzerland relaxed coronavirus lockdown measures, they said on Monday.

The decisions end six weeks of partial or full closure that disrupted global gold supply and helped to drive prices in New York and London further apart than they have been in decades.

Read more about NY-London price discrepancies on our Market Disconnect page

With all of the recasting that needs to be done to satisfy the world’s different-sized gold bar demand, other supply chain disruptions notwithstanding, it seems the refiners will have a full workload regardless of whether they’re “almost” or fully operational.

Which seems to mean about 90% of capacity:

To minimise the number of people in the refinery and protect the health of employees, Argor said it would divide staff into three groups working eight-hour shifts.

By keeping the facility running 24 hours a day and working on Saturdays it could operate at roughly 90% of normal levels, Argor added.

Here’s the question: Will there will be an added cost to running at a lower capacity and doing other things in the name of Covid-19 disease prevention, and if so, who will pay those costs?

Regardless, the Swiss refiners are important indeed, but they are just one link in the supply chain.

That is to say, There are other links in the supply chain that can be, and are, under strain, such as the logistics part of the supply chain or the mining part of the supply chain, both of which have been under severe strain of in the form of closures and disruptions of their own.

Said differently, and in the form of a question, the increased capacity of two Swiss refiners helps ease supply chain disruptions, but to what degree will this increased refining capacity ease physical tightness in the various physical gold markets?