London (AFP)

Gold is generally prized by investors during crises. The magnitude of the coronavirus pandemic and its devastating effects on the economy are such that the brands specializing in the physical sale of the precious metal are crumbling under orders.

To the point where, for customers in a hurry, it could be difficult to get hold of precious bullion, at least in the short term.

"The phone keeps ringing" and "the demands have exploded," said AFP Alessandro Soldati, director of Gold Avenue, official dealer of the Pamp group, world leader in precious metals.

In three weeks, with the spread of the epidemic, the company exceeded the number of sales made in the last quarter of 2019.

Most of the orders are made online, "we have all the tools to meet this growing demand," says Omar Liess, chairman of the board of directors of the Swiss-based company.

For the moment, the main difficulty is logistical to ensure deliveries, with many flights canceled. Customers however keep the possibility of keeping their coins and ingots in safes, companies specializing in the sale of gold often offering storage solutions.

On the other hand, for those who would prefer to keep their yellow metal under their mattress, they will have to take their troubles patiently.

"Due to the volume of orders, we must expect shipping times of more than 15 working days," warns on its website the company JM Bullion, based in the United States.

- Closed mines and refiners -

This jump in demand "has a positive impact (for the company) but also negative with delays for deliveries to the United Kingdom," said AFP Liam Sheasby, marketing and media manager at BullionByPost, who also supports for several weeks the client team.

There is currently no shortage of gold proper, except for the newly minted coins, which have not been found for 48 hours and whose stocks are "limited" compared to other more expensive products, explains Laurent Schwartz, director of the Comptoir National de l'Or. But in the longer term, the situation could become more complicated.

"The industry as a whole is affected," said Liess, while several refineries have had to shut down.

In Switzerland, Pamp, Valcambi and Argor-Heraeus - refiners representing around a third of world production - had to temporarily stop their activities at the request of the authorities.

And South African President Cyril Ramaphosa on Monday imposed strict confinement for three weeks in his country, the continent's leading producer of gold and most affected by the coronavirus epidemic in sub-Saharan Africa.

- As in 2008 -

In times of economic uncertainty, gold often appreciates, benefiting from its safe haven status.

While many central banks inject huge amounts of liquidity into the financial system, the yellow metal is seen as a good investment to protect against inflation and maintain purchasing power.

Those who turn to this type of product are often individuals "wealthy or part of the upper middle class rather than the ultra-rich," said John Reade, analyst at the World Gold Council.

Professional investors, on the other hand, tend to source directly from the markets by buying financial assets indexed to gold, "more accessible and cheaper", he adds, while certain individuals "like the ultimate security of having the assets in their hands. "

After reaching a peak in seven years at the start of the month, the ounce of gold dropped slightly in value against the dollar, which also benefited from an increase in demand. But for analysts, this bout of weakness against the dollar may not last.

According to Mr. Liess, we find the same phenomenon as during the 2008 crisis when gold first collapsed before gradually climbing over the following three years.

© 2020 AFP