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Gold, silver coin crunch is not getting better - Peter Hug

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(Kitco News) - Bullion investors shouldn’t expect to see a drop in premiums anytime soon as the supply crunch for gold and silver coins continues to grow, according to Peter Hug, global trading director for Kitco Metals.

However, in some good news for investors, Hug said that investors holding bullion have a little more selling power.

“Dealers will pay up for physical material so they have something in their inventory to meet the demand on the other side,” he said. “I'm not suggesting you sell, but if you're in a situation where you're trying to raise cash or you believe the market is, this would be a time to negotiate a bid with the dealer.”

Although Hug said that he is bullish on gold because premiums are so high, it might not be a great time to chase physical bullion.

Retail premiums are expected to stay where they are, given supply-side disruptions, Hug said.

“I think it more impacts the production of the gold Eagle and gold Buffalos. There is a shipment that is scheduled to be delivered this week to the dealers, and I think that will be it for a while,” he said.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.