Sprott Money Contact Form

Thank you for contacting Sprott Money.  We will respond to you within 1 business day.



The Sprott Money Team

Sprott Money Ltd.
111 Queen St. East
Suite 501
Toronto, Ontario M5C 1S2

[t] 1.888.861.0775
[f] 416.861.9855

Administrative office only - no walk-in sales.


Please Try Again After Some Time...
Please enter valid captcha
Loading Image
Click here for an Important Message for Customers

Important Message For Customers:

The Ontario Government has legislated that all non-essential businesses MUST BE closed BY 12:01 am on March 25. The health and safety of our employees, clients and our community is our top priority. To do our part in slowing the spread of COVID-19, our staff are working remotely until further notice.

Furthermore, our carrier, UPS, has notified us that all shipments will not be insured and will not require a client’s signature upon delivery until further notice. Given the nature of our business, we are not willing to take that risk with your investments. As a result, we are temporarily suspending all shipments within Canada until UPS lifts these protocols.

Use e-mail for more expedient service.

Please be assured that your orders will be shipped to you as soon as we can. These are valuable investments you are making, and we want to make sure we send them in a safe, secured and insured manner. Should you have any questions or concerns, please reach out to us at 1-888-861-0775 or email us at sales@sprottmoney.com

Thanks for your patience and understanding in this difficult time.

Swipe to the left

RPT-COLUMN-Can gold keep rallying even as physical demand plunges?: Russell

RPT-COLUMN-Can gold keep rallying even as physical demand plunges?: Russell
By Thomson Reuters 2 months ago 401 Views No comments

(Repeats earlier item. No change to text)

* GRAPHIC: Spot gold price vs physical gold demand: https://tmsnrt.rs/3c1TjYh

By Clyde Russell

LAUNCESTON, Australia, April 30 (Reuters) - Imagine a commodity that posted a strong 12.8% rally in prices in the first quarter despite demand dropping a staggering 26% as buying collapsed in the world's two biggest consumers. Welcome to the weird world of gold.

Total physical demand for gold in the first quarter of 2020 was 753 tonnes, down from 1,019 tonnes in the first quarter of last year, according to data released on Thursday by Refinitiv Metals Research.

This was the lowest quarterly demand in 11 years and was driven by the novel coronavirus pandemic causing jewelry and bar and coin investment to fall off a cliff.

At the same time, the coronavirus helped boost flows into investment products such as exchange-traded funds (ETFs), which jumped 300 tonnes in the first quarter, taking the total holdings to a record high above 3,000 tonnes, according to Refinitiv.

The spot price of gold increased from $1,517.01 an ounce at the end of last year to close at $1,711.25 on Wednesday, and at one stage had rallied 15.1% to an eight-year high of $1,746.50 on April 14.

The price action suggests that gold is being driven by investor interest and its traditional role as a safe haven in times of economic uncertainty.

So far, this has been enough to outweigh the loss of physical demand in the two biggest buyers, but the question is whether this situation is likely to persist, or whether the lack of physical demand will act as a drag on the rally.

Ultimately, if physical demand remains weak in China and India, it would be hard to mount a case for a sustained gold rally on the back of investment flows.

China's jewelry slumped 62% in the first quarter compared with the same period in 2019, and its retail bar and coin investment was down 53%.

India's jewelry demand dropped 34% and its bar and coin investment by 49%, according to the Refinitiv data.

These precipitous declines were largely a result of the impact of the coronavirus causing lockdowns in both countries, although India's only started in late March, just as the quarter was ending.


The question is whether the end of lockdowns will prompt a return to previous levels of physical demand in China and India, and while it's likely it will recover from the dire first quarter numbers, it may take some time to be fully restored.

India's demand may be crimped by the high domestic price, with spot gold hitting a record high of 133,462 rupees ($1,770.05) an ounce on April 16, before slipping slightly to close at 129,117 rupees on Wednesday.

In rupee terms, gold has rallied 19.3% since the end of last year and by 44.7% since the end of 2018.

Such a steep increase is likely to mean lower consumer demand for the precious metal, notwithstanding its role in the nation's cultural heritage.

Gold also set a record high in Chinese yuan, reaching 12,304 yuan ($1,742.78) an ounce on April 14, narrowly eclipsing the previous peak in September 2011.

While record high domestic prices may depress China's jewelry demand, it may encourage investment buying as consumers tend to buy into rallies.

Nonetheless, it may take some time for China and India to return to growth in gold demand, leaving the heavy lifting for any rally to largely Western investor demand.

The rapid expansion of money supply from central banks and governments, coupled with interest rates effectively around zero, certainly provides a bullish backdrop for gold.

But for the yellow metal to rally to $3,000 an ounce within 18 months, as recently forecast by Bank of America analysts, the world economy would likely have to experience something far worse than the Great Depression of the 1930s. (Editing by Robert Birsel)

About Sprott Money

Specializing in the sale of bullion, bullion storage and precious metals registered nvestments, there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.

Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.

Back to top