August Gold Slowdown

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August Gold Slowdown
Most years we have noticed that Krugerrands, sovereigns, and other bullion coins get harder to source in August, easing in September.

European Holidays Much of mainland Europe closes down in August, and everybody packs their bags and migrates to the south of France to lie on the beach. For several years now, we have noticed that, even though many of our buyers are also "on holiday" in August, it is harder for us to find enough coins to meet demand and cover our sales. Once we reach September, the situation starts to ease back to normal, although we did observe that, in 2007, this stretched later into September than in other recent years. On this basis, we anticipated that there may be a similar pattern in 2008, and as at 10th September 2008, we are watching for signs that supply will return to normal soon.

Secondary Market The phenomenon we have described above manifests itself because most of the investment gold bullion we handle comes from the secondary market. If we had to source most of our investment gold coins from the primary (new) market, we would need to increase our premiums ( i.e. charge more). We are reluctant to do this, as we try to provide the most competitive source of physical investment gold possible. As we have mentioned on other pages of our site, eventually we expect the pool of secondary market coins to deplete relative to demand, and when this happens, all premiums will increase accordingly.

August 2008
We created this page in about July 2008, and the most recent edit was August 2010.
The banking and credit crises of October 2008 exacerbated the situation. From then, for about six months or so, some lemmings were paying stupidly high prices for almost any gold coin or bar. Our advice was to avoid doing so, but ours is only one small voice, and many other dealers were actively encouraging people to pay silly prices.
One of the worst places to buy investment gold is eBay, which is populated by many small-time dealers trying to get rich quick at anybody's expense. These cowboys are not interested in any long term relationship with customers, and would rather fleece a mug punter today as there will be many more along tomorrow. To some extent they are right, but we would prefer not to make a fast buck at the risk of future reputation and trust, which we have spent almost 50 years building up.