Goldreporter writes: Precious metal dealers in Germany have literally been run down after the latest slump in gold and silver. Wholesalers already expect deferred deliveries.

The latest plunge in gold and silver late last week has led to a sharp increase in demand by German precious metals investors, which also continued on Saturday. There was a particularly strong demand for silver coins. “On Thursday and Friday people had to draw numbers in order for us to control the run”, reports Andreas Heubach, CEO of Heubach Edelmetalle in Nuremberg. “On both days we sold each around 40,000 silver ounces – incredible”, he said. “Demand is back – and hysteria as well”, he evaluated.

Tremendous Run
“The run is tremendous, even today on a Saturday”, Christian Brenner, CEO of Philoro Edelmetalle GmbH in Leipzig and Berlin reports. Despite the high counter trade level in September, demand has increased by 100 percent, online-trade even soared by 300 percent.

“Run is not the right expression“, says René Lehmann of Münzland in Dresden. “We’ve seen up to 80 percent of our regular customers taking advantage of the slide to build up more positions. On those two days, on Thursday and Friday, we made approximately 50 percent of our monthly revenue”, he reports to Goldreporter. Maple Leaf (1 oz.), 1 kg Lunar and ½ oz. Great White Shark were particularly in demand, since Münzland had a special offer on them. In gold especially 1 oz. Maple Leaf and 1 oz. bars have been purchased. The ratio of buyers to sellers has generally been at 50 to 1.

Dominik Lochmann, CEO of ESG Edelmetall Service GmbH & Co. KG, confirms the surge in silver coins that are subject to differential taxation. Even higher taxed 1 kg silver bullion did very well.

Increased demand also for gold
The big German precious metal dealers also confirm the strong growth in turnover. Oliver Heuschuch, head of precious metal trades at Degussa Goldhandel GmbH, didn’t report to Goldreporter that there is a particular increase of demand for silver, but sales in general have “greatly improved”.

Robert Hartmann, CEO of Pro Aurum, was more specific: “On Thursday demand had improved considerably. On Friday we had 250 percent more business (tickets) than on average in the weeks before. But it were rather gold bullion and coins that people focused on. Silver demand rose about 1.5 times.“

Deferred deliveries foreseeable
And: A short squeeze is indicated. “Deliveries are already delayed with one or the other supplier. In any case we will have sufficient amounts for private customers at our disposal, but in wholesale disposability is currently becoming scarce. There is high demand for silver Maple Leaf, Krugerrand and 20 to 250 gramme gold bars.”, Christian Brenner said to Goldreporter.

Temporarily Heubach Edelmetall wasn’t able to offer any more silver Maple Leafs. “We have sold vast amounts of Maple Leafs on Thursday and Friday. After they were sold out we sold some 6,000 to 8,000 ounces of US-Eagles, which is quite unusual”, Andreas Heubach said.

More quiet in Austria
The surge is not a pure German phenomenon. “Since we don’t offer differential taxation on silver coins in Austria we don’t feel price corrections to the same extent here as in the branch stores in Germany. Demand for gold is overproportionally high, analogous to Germany”, Philoro’s Christian Brenner said. The precious metals specialist’s head quarter is located in Vienna.

Insight: Late last week there was another harsh slump on precious metal prices. Silver prices fell more than 6 percent from Wednesday to Friday, which even when calculated in Euros was still a 5.3 percent plunge. On Friday night an ounce of silver was only $ 16.19 (€ 12.92). This was the lowest level since February 2010.

Gold ended last week’s trading at $ 1,172, an equivalent of 935 Euros per troy ounce, but calculated in Euros the gold price is still around 7 percent in the black. Annual loss on silver currently amounts to 17 percent, respectively 9 percent (in Euros).

Goldreporter

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