Is it time for the bears?
The last weeks had a lot of impact on our personal lives and the precious metal markets. With the coronavirus lockdown in Germany social life has reached a low. This hasn't changed much in my life, but as not everyone is an introverted online hermit, things changed considerably for many people.
Even though we don't have an official lockdown in my state, we are urged to only leave the home if absolutely necessary. And you can't really do much aside from the necessary anyway. Everything is closed at least until the 20th of April. Only drug-, hardware-, and grocery stores are allowed to open along with banks.
Other businesses either continue work if they can or file for reduced working hour money. Most do the latter. In my company, which is a software development company everyone is doing home office. Luckily we can do that, others can't. And that is a big problem.
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Chile 50 Pesos 1970
It's looking similar all over the world, and governments are stepping in by throwing money around. The European central bank started with up to 750 billion, USA 2.2 trillion and South Africa starts quantitative easing. The precious metals market should be thrilled, but somehow it isn't. In that current situation, both bears and bulls are just confused.
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France 20 francs 1887 Napoleon Bonaparte III
But that didn't stop me from "panic buying" a couple of gold coins. Which I'll share with you in this article. The interesting part is, that the premium on precious metals has been rising since. The reason is most likely that most mints have shot down along with mines. And that caused an artificial shortage of precious metals and the resulting products. Which should resolve itself after the lockdown.
But for now, I think I'll stop buying from certain dealers. gold premiums for bullion are around 7% from 0.x just a month ago. And the silver premium rose to a crazy 56%. I won't mention the other precious metals which reached three-digit percentages over spot in Germany.
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German Empire 20 Mark 1873 Emperor Wilhelm
Others did some panic buying as well, but mostly toilet paper and some pasta. Others tried respiratory masks, disinfectants, and soap. It does tell something about the stupidity of people. We have neither a food shortage nor do most people actually need respiratory masks or disinfectants. People in the healthcare system actually need them, others don't.
The only thing they need to do is wash their hands. Thoroughly and regularly. Disinfectant is only a replacement for soap, not necessary for normal people to have around.
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Soviet 10 Rubel 1976 chervonets
Stacking saves dragons from unemployment, just like Elly my plush dragon
