Demand for Gold Impacts Supply

Gold prices have skyrocketed in the past month, as investors are searching for ways to stabilize their investments and provide a hedge against falling stocks.

While this increased interest in gold has been great, it’s also impacted the supply of once-readily available gold coins. Demand for gold has never been greater, so reputable gold suppliers are working hard to ensure that the demand is met. 

Hedge against the uncertainty

Many types of gold coins are selling out including American Eagles. These are some of the most popular and widely circulated bullion coins used for investing, and yet gold’s popularity has increased so much that some popular gold coins are in short supply.

Contributing to this gold shortage is the fact that the US Mint in New York (West Point)—the mint that produces bullion coins—has shut down due to COVID-19. So while gold coins are still available in the market, they are not currently being produced. (The US Mints in Denver and Philadelphia have also closed their tours and gift shops for the time being.)

Additionally, with shelter-in-place orders still in effect, shipping companies are overloaded, extending shipping times. Getting items from overseas is proving difficult as well, as trade has been in flux since COVID-19 was declared a global pandemic.

These two factors combined—the high demand and delivery constraints—have impacted supplies of gold around the world, making it difficult for investors to purchase gold.

There’s plenty of gold available in the ground, yet some mining operations have been shut down in an attempt to slow the spread of the coronavirus. This is where investing in gold stocks differs greatly from investing in physical gold. Investments in gold stocks are affected by workers not being able to actually retrieve gold from the mines.

Because those mining companies are unable to make money by selling the gold they mine, their stocks are likely suffering. But physical gold, invested in as bullion, will retain its value—or, in times like this, it will increase in value! This current pandemic is exactly the kind of situation where you want to invest in physical gold, not just gold stocks.

But, in the current situation, supplies of physical gold have also been impacted. So while the value is increasing day by day, the supply isn’t matching that demand, in part, because demand is so high currently and also likely because new gold isn’t being introduced as quickly into the market.

Nevertheless, there is still gold to be invested in! Even though some of your favorite investment coins might be temporarily out of stock, there are still gold coins available!

In this time of economic uncertainty, we encourage you to research if gold is a good option for your investment portfolio. Like any other investment, it should be considered carefully and invested in smartly.

Over the years, gold has proven to be a safe haven that investors turn to in times of economic downturn or recessions. Demand is high for a reason, and that reason is because gold has a proven record to be a stable investment when stocks fall.

We hope you’ll start the valuable and fun process of investing in gold today! Not only is it an entertaining hobby, it can prove to pay off in the long run if you’re willing to invest the time and energy to diversify your portfolio.

Hedge against the uncertainty