Gold is a safe haven in times of crisis. Unfortunately for investors, as some of the Swiss refineries have been forced to stop their production, supply is getting scarce.
The supply of bullion from Switzerland has been interrupted, according to a report by Germany’s «Handelsblatt». About 70 percent of all the gold mined globally is refined in Switzerland.
Three out of five Swiss refineries are based in Ticino, the region that borders Italy and which is the area with the highest per-capita coronavirus infection rates in Switzerland. The regional government on Sunday ordered non-essential industries to close their production, a ban that included gold refineries.
The three companies shut down their production lines, with Argor-Heraeus in Mendrisio closed until the beginning of April and rivals Valcambi in Balerna and Pamp in Castel San Pietro also affected.
A Wobbly Safe Haven
The three refineries have already struggled to keep their business going as many of their employees live in neighboring Italy. The flow of traffic has been reduced by the government to stop the virus from spreading. Northern Italy is the biggest coronavirus hotspot in Europe.
Still, gold has not fully held its promise as a safe haven, having dropped more than 7 percent of its value from a month ago. In recent days though the price of the precious metal recovered lost ground.
