Swiss gold refiners to resume work, easing supply constraints

Three of the world’s biggest gold refineries said they will partially reopen after a two-week closure that disrupted the global supply of the metal.

Valcambi, Argor-Heraeus and PAMP, located near the Swiss border with Italy, were shut by a local government order on March 20 which closed non-essential industry to contain the spread of the coronavirus.

Together they process about 1,500 tonnes of gold a year — equivalent to a third of global supply — and are a key transit point, purifying mined material and reshaping metal moving between markets that require gold in different sizes and shapes.

Fears that it would be impossible to turn enough 400-ounce bars stored in London into 100-ounce bars used in New York drove U.S. gold futures sharply above London prices after the refiners closed.

Valcambi and Argor said on Sunday they had received government approval to partially reopen on April 6. PAMP said on Friday it had permission to restart.

They said this was on condition that they observe more stringent hygiene and safety measures.

Valcambi and PAMP said this meant they would operate at less than 50% capacity. Argor said it would have a “reduced work regime”, splitting staff into three groups working separate shifts.

The economic shock caused by the coronavirus outbreak is pushing up demand for gold from retail and financial investors.

Gold is traditionally seen as a ‘safe-haven’ asset which holds value better than others through times of turmoil.

The three refineries also process silver and other precious metals.

(By Peter Hobson; Editing by Jason Neely)