Australia's Perth Mint said its gold sales shot up in April to their highest level in at least eight years as concerns of a shortage prompted investors to stock up to seek cover from the economic blow from the coronavirus.
Sales of gold coins and minted bars in April rose to 120,504 ounces, the highest since at least March 2012, gaining 28.5% month-on-month and 502.8% higher than the same period last year, the refiner said in a blog post on Friday.
Sales of silver coins in April jumped 22.3% from March, and rose 134.3% from the same period last year, to 2,123,121 ounces, its highest since September 2015.
"While the trigger for this demand is shortage of physical supply of bullion coins due to logistical issues, investors are scrambling to hoard more physical gold. This is very well evident in rallying premiums for gold coins," said ANZ analyst Soni Kumari.
Benchmark gold prices <XAU=> jumped 6.9% in April while silver <XAG=> rose 7.5%, with both precious metals marking their best month in eight. [GOL/]
Spot prices of gold, considered a safe store of value during times of economic or political uncertainties, have risen more than 10% this year, although sharp selloffs in wider markets have, on occasion, triggered falls in bullion as investors sold precious metals for cash and to cover losses elsewhere.
"The particular factors driving demand amid COVID are the theories of metal shortages fuelled by refineries closing down, so everyone is concerned about a potential physical metal squeeze," Perth Mint's CEO Richard Hayes said in an emailed response to queries from Reuters.
"There is plenty of metal around, it's just not in the place people expect it or necessarily in the form they may want it."
The Perth Mint, owned by the government of Western Australia, refines more than 90% of newly mined gold in Australia, one of the world's top gold producers.
The mint was able to continue operations while other major refineries and mints closed or reduced operations due to the pandemic, The Perth Mint Group Manager, Minted Products, Neil Vance said.
(Reporting by Harshith Aranya in Bengaluru; Editing by Susan Fenton)
