In French-speaking Switzerland, gold merchants are rubbing their hands and talking about a “historic year”. Their customer base has skyrocketed, looking to sell as much as buy the precious metal.
The price of gold has soared this year, rising more than 30% and coming close to the record level of $2,800 per ounce (around 31.1 grams). In French-speaking Switzerland, gold merchants are rubbing their hands and talking about a “historic year”. Their customer base has skyrocketed, looking to sell as much as buy the precious metal.
“During the year, we recorded peaks in footfall in all of our 35 stores. In recent weeks, we have noticed that the number of people coming to sell gold has tripled,” Eve Conesa, marketing manager at The Swiss Collector, told the AWP press agency.
“During the Covid period, sales and purchases were going well but, in recent months, activity has been shaken up like never before, gold being considered a safe haven,” she rejoices, adding that income 2024 of the company will be “historic”.
Same observation at Gold Service, a company which has around ten stores in Switzerland: “Our customers are 20 to 30% more numerous, or even more in recent weeks,” notes its general director, Yann Bouillonnec.
“The trend is towards selling because people who bought gold want to realize their profits and this is the right time. However, gold purchases are also significant because it is a long-term investment. If there have always been ups and downs, in 30 years the price has continually progressed,” he continues.
These two specialists in purchasing and resale observe that their clientele has the profile of “Mr. and Mrs. Everyman” but can also sometimes be very wealthy. If it mainly sells jewelry – inherited, out of fashion or broken – investment gold, i.e. ingots, ingots or coins, is not left out with sales ranging from a few grams to several kilos.
“You should know that 100 grams of gold now brings in more than 5,500 francs to the seller, depending on the carat,” notes Mr. Bouillonnec.
At Degussa Goldhandel, one of the largest European gold traders, which mainly buys and sells bars and coins, the renewed interest from customers is also spectacular with “50% more customers than before the summer” , according to the general director of this Swiss division of the Degussa group, Andreas Hablützel, who also speaks of a “record year”, without wanting to give figures.
The subsidiary reported revenues of 2 billion francs in 2017.
“Dry” stocks
“We are selling a lot at the moment, we are buying the legacy gold bars but customers also want new bars. Supply was a little complicated this summer but our stocks can now support demand,” says Mr. Hablützel. He emphasizes that his company has the advantage of selling its own ingots, supplied “without problem” by the foundries with which it collaborates.
-As for The Swiss Collector, gold stocks are dry at the moment due to the unprecedented boom. “We are operating just in time,” says Ms. Conesa, with the company awaiting new deliveries from the foundries.
The boss of Gold Service, supplied by the Argor Heraeus refinery, speaks of occasional delays in supply, while specifying that he is “in any case not in shortage”. “We have few stocks, mainly for safety reasons,” he reveals.
Fluctuating prices
If the trend is upward, the price of gold continues to fluctuate. Thus, retailers must adapt their prices at least once a day, or even several times in the same day, as is the case for Degussa which is based on the price in real time. “We update our prices every five minutes thanks to an automated system,” says his boss.
In London, the London Bullion Market Association (LBMA) also sets a fixed average price twice a day, which traders around the world rely on. To the price of gold, they add the price of their services, prized like never before.
“We have taken over from the banks which favor investments to the detriment of the physical sale of gold. We have the expertise to evaluate gold and advise our clients,” argues Mr. Bouillonnec.
For the year ahead, the golden age of the sector seems set to continue, according to these specialists who predict a price of the yellow metal which will continue to increase, even if less markedly. “There will therefore be no shortage of customers,” predicts Ms. Conesa, who recalls that “in Switzerland, there is a culture of investing in gold.”
Not counting jewelry, 22% of Swiss people own gold, according to a recent study by the University of St. Gallen and precious metals dealer Philoro. This is equivalent to 200 tonnes of gold in the form of coins and bars for a value of 14.9 billion francs, or 100.83 grams of gold (approximately 7,521 francs) per inhabitant of the country.
The price of the yellow metal could outperform next year
The price of gold should continue to rise next year, possibly even creating a surprise just as it did in 2024, analysts say. They highlight global geopolitical uncertainties as well as the unpredictability of the decisions that will be taken within the Trump government in the United States.
“We are entering a more unpredictable era, because (in the United States) we will have a government in place that embraces radical ideas and is not afraid of disruption,” notes the senior fx strategist at Pictet Wealth Management, Michael Hart, in an interview with the AWP news agency.
“These are therefore arguments which plead in favor of the demand for gold, which could surprise on the rise,” he adds.
The expert points out, however, that given his unpredictable personality, Donald Trump could just as easily be disconcerting by turning out to be “very conciliatory” after having wanted to make headlines by pleading for mass deportations of immigrants, which allowed him to achieve easy victories.
3150 dollars l’once
But the future president should logically “push quite hard” his immigration policy and customs tariffs while the question of the budget remains open, according to Mr. Hart who expects gold to reach “up to 2800, even 3000 dollars per ounce (around 31.1 grams)” in 2025.
Norman Villamin, chief strategist at UBP, makes an identical forecast: “gold should record a significant rise, to $3,000 per ounce, driven by geopolitical uncertainties and strong demand for physical gold from banks central companies and individual investors.
At Goldman Sachs, analysts also favor record prices next year. In their most bullish scenario, they even see the yellow metal surpassing $3,000, to $3,150 per ounce by December 2025, an increase of around 19% from current levels.
Such a surge could be fueled by increased demand from global central banks, coupled with concerns about U.S. fiscal sustainability and trade wars, they say.
Apart from continued positive demand from the central banks of emerging countries as well as from retailers and investors, the surge in market prices in the third and fourth half of this year was also driven by ETFs, i.e. funds that buy gold for speculative purposes, notes Mr. Hart. “When the market is dynamic, it gets carried away,” he notes.
And if the price fluctuates constantly, “it is because it is very sensitive to geopolitical events,” adds the economist, while assuring that “central bank purchases will continue to structurally support demand.”
