Swiss Refineries: Suspensions, Price Hikes

Two of Switzerland’s premier gold refineries, Metalor and Argor-Heraeus, have just made headlines with moves that underscore a tightening grip on physical gold supplies. Literal suspensions of certain bar sales and new surcharges hint at a market under pressure. Are these signals that the “gold price” based on mostly digital trades is becoming unsustainable?

Metalor, a titan in the Swiss refining industry, has reportedly slapped a per-ounce surcharge on all its gold products, citing shortages that have strained its ability to meet demand. This isn’t just a price change; it’s a clear sign that the physical gold market is feeling the heat from relentless buying. Meanwhile, Argor-Heraeus, another heavyweight in the global bullion scene, has taken an even bolder step: Suspending orders entirely for its popular 50 gram and 100 gram minted gold bars. The refinery has been straightforward about the reason. Supply simply can’t keep up with the flood of orders pouring in.

These moves come as gold prices have flew past US$2,950 per troy ounce, inching ever closer to the psychological US$3,000 threshold that analysts have been buzzing about. UBS is forecasting a climb to US$3,200 by year-end, while Goldman Sachs recently raised its target to US$3,100, pointing to inflation fears and a complicated U.S. debt outlook. With physical supply now visibly tightening, the case for owning gold has rarely looked stronger.

The implications are stark. Swiss refineries like Metalor and Argor-Heraeus aren’t just random players, they’re the backbone of the global gold trade, processing hundreds of tons annually for investors, banks, and jewellers. When they start pulling levers like surcharges and sales halts, it’s a sign that the physical market is stretched thin. Rumours swirling on social media even suggest London’s gold warehouses might be nearing empty, with delivery delays from the Bank of England stretching from days to months. While unconfirmed, such whispers are playing out in market purchases.

Gold has always thrived in times of uncertainty, and today’s economic, political, and now logistical chaos has ticked just about every box. The refineries’ actions aren’t a fluke; they’re a response to a world where demand is outpacing supply. Central banks bought over 1,000 tons last year alone, and with retail and institutional investors piling in, the physical crunch is starting to bite.

The current paper-to-gold ratio is currently sitting at about 129 to 1 and the real story is the supply shortage and safe-haven rush. Metalor’s surcharges mean their customers will pay more per ounce now, and Argor-Heraeus’s suspension suggests some bars might soon be collector’s items. What we are witnessing now looks like the fabricated global gold price becoming unsustainable to maintain for physical refiners.