The black out of gold in Greece

Of George Lampiris

Gold is facing the effects of successive crises such as the previous ten-year economic crisis, the ensuing health crisis and the war in Ukraine.

The effects on the most popular and well-known of the precious metals are reflected in the Greek market, both in the field of retail and jewelry stores that have products made of gold, as well as in the field of investments in this metal, which also acts as an investment shelter.

It is noted that until yesterday the price of gold with a content of 0.995-1,000 per gram at the level of sale was at 60.24 euros, while the purchase price by the Bank at 53.31 euros. In fact, the increase in selling price is estimated to have increased by about 20% compared to a year earlier.

Antonis Vourakis: In the background is the purchase of gold products from the world

Characteristic is the position of the well-known jeweler, Antonis Vourakis, owner of the store, Vourakis, on Voukourestiou Street in the center of Athens, who acknowledges the fact that in addition to the increase in the price of gold and the wider financial situation, they have put in the background the purchase of gold products.

“Now one would rather turn to basic necessities than buy jewelry,” he notes.

“During the years 2020-2021 our work fell in sales by 80%. There were temporary signs of recovery in the summer of 2021 and now at the moment the demand is moving at very low levels”, he adds.

Extensive increases in import prices in March and April

Vourakis, in addition to products produced in silver and gold workshops in Greece, also supplies other products from well-known companies abroad.

“We are facing price increases in both March and April. We saw a first price increase of 10% in March and now in April there will be another increase of 10%.”

The price of pure gold reaches 60,000 euros

At the moment the price of pure gold per kilo is around 60,000 euros. As a result, one of the most well-known jewelry companies, introduced by Vourakis in Greece for the last 30 years, uses copper as a second metal in jewelry that previously combined gold and silver or gold and white gold. .

This move resulted in this foreign jewelry company creating the same jewelry with gold and copper, in order to achieve the greatest possible cost savings.

“In fact, there are many companies that create jewelry made of titanium, which is a metal much cheaper than precious metals,” notes Mr. Vourakis.

Even in 8 months the repayment of suppliers

At the moment, the entire market of jewelry stores has significantly extended the repayment time of its suppliers.

“We have been forced to make bigger arrangements than those that existed in the previous period, reaching a repayment period of even 7 or 8 months,” says Mr. Vourakis.

D. Krinakis: The market was already affected before the war in Ukraine

For his part, Dimitris Krinakis, who trades in gold in Greece, notes that “gold did not need to reach 60,000 euros per kilo, something that happened recently. The market had already been hit before the war in Ukraine.” .

As he explains, a key part of gold is sold to goldsmiths, who supply raw material to create jewelry. Another market segment is the sale of investment gold.

“The world that invests in gold has shrunk rapidly in recent years. The peak of the gold market came before the ten-year economic crisis, when people turned their cash into gold investments.

Then, having run out of liquidity reserves after the crisis ended, he could not buy gold again. In fact, the most probable phenomenon is that someone sells gold to fulfill part of his obligations. “Traffic in the investment sector is minimal to negligible.”

The strong fluctuations of gold are a deterrent

With regard to the supply of goldsmiths with gold, there are delays in the import of raw materials. “It is typical that foreign metal processing plants supply the market with limited quantities due to the sharp fluctuations in the price of gold even within the same day.

It is characteristic that in the morning the price can start by 2,000 increased compared to the previous day and by the end of the same day it has lost 2,000 or 3,000 euros “, says Mr. Krinakis.

At the same time the decline in tourism has drastically affected the sales of gold products.

Goldsmiths have limited the quantities they buy, as they now find it difficult to risk buying quantities of metal, without knowing if they will be able to sell the jewelry they will make.