Physical Asset Challenges: Suppliers Can’t Keep Up with Gold Demand
CONTENT

  • Gold demand rises to highest levels since 2013 amid pandemic.

  • Suppliers fail to process orders amid global supply chain disruptions.

  • This situation again reminds of the advantages of the digital version of gold – Bitcoin..

International consortium of news organizations developing transparency standards.

Gold bar sales rose to their highest levels since 2013. However, this situation again revealed the inherent disadvantages of physical assets..

Gold and precious metals have always been considered a traditional refuge in times of increasing economic uncertainty. In the midst of the severe global crisis provoked by the COVID-19 pandemic, investor demand for gold has grown significantly. Suppliers were simply unable to cope with this explosive growth in demand..

Physical Asset Issues: Vendors ...

Gold on horseback

According to a recent Bloomberg report, Perth Mint, Australia’s largest precious metals refinery, has significantly increased production in response to current demand growth. [Bloomberg]

However, a problem arose: difficulties with the supply of finished products. The epidemic has disrupted traditional international supply chains, causing severe headaches for many gold bar suppliers..

Logistic problems negatively affected the world’s largest gold trading floors and precious metal quotations. So, last week, gold futures in New York were trading at the moment with a premium of $ 70 relative to spot prices in London.

Physical Asset Issues: Vendors ...

Suppliers hope that this OOS will only be a short-term arbitration problem. However, for digital asset enthusiasts, this situation has become further proof that physical assets have such a disadvantage as a high dependence on supply chains. At certain times, it can manifest itself in full force..

Gold can be digital

Against this background, it will not be superfluous to remember that recently more and more mainstream experts are paying attention to an alternative, cryptocurrency version of gold. These analysts believe that bitcoin (BTC) is now moving to a “gold-like status of maturity” and efficiency..

In the modern world of digital technologies, all processes are noticeably accelerating, and the physical restrictions associated with the supply of gold can significantly affect the price of an asset. It is also important to remember that problems can arise not only from supply chain disruptions, but also for other reasons, including political.

Meanwhile, all that is needed to move any amount of bitcoin is only the presence of the Internet. In addition, the crypto market, unlike the gold market, is open 24-7.

Building a Precious Metals (Gold & Silver) Portfolio

This makes cryptocurrency much more mobile than precious metals. Perhaps over time, this will encourage investors to look more closely at the digital alternative to gold..

Do you believe that Bitcoin will gain universal acceptance as the digital version of gold for the foreseeable future? If not, why not? Share your opinion in the comments!

Disclaimer

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