Hi,
Generally, people believe that there is always enough gold. This is because people can buy and sell it anywhere and anytime. In fact, people can buy and sell gold every second and talk about it nonstop. However, physical gold is different from the paper markets. When people begin to demand more physical gold compared to what is being produced, things begin to change. This affects investors as well.
Physical Gold Is Not Unlimited
Gold does not magically appear when people demand it. In fact, there are limitations on how much can be produced and distributed. This means that when people begin to buy more gold due to different reasons, the mint cannot produce more gold. This causes a situation where people are demanding more gold compared to what can be produced. This affects investors as well.
Premiums Rise Before Gold Prices
Usually, people do not focus on premiums when it comes to gold. This is because premiums do not affect them as much as prices do. However, premiums are essential when it comes to investing in physical gold. This is because premiums rise when people demand more gold compared to what can be produced. This affects investors as well because premiums rise even when prices do not move significantly. In fact, premiums move before prices do. This surprises people who do not focus on premiums when it comes to investing in physical gold. In fact, premiums move even when people do not buy any gold.
Product Availability Declines
Generally, people buy different products when it comes to investing in physical gold. This means that people can buy different products from different mints. However, when people begin to demand more gold compared to what can be produced, different products begin to run out of stock.
This is why experienced buyers are always on the lookout for availability, even if prices are favorable. Options are important, especially during uncertain times.
Delivery Delays Become More Common
As supply is overwhelmed by demand, delivery times extend further and further into the future. Mints focus on their larger contracts, refineries have backlogs to clear, and transportation systems become congested with demand. Even good dealers may have delivery issues, not because they are mismanaging their operations, but because the overall system is struggling to keep up.
For investors who require predictability, this is just one more reason to invest early rather than waiting until supply issues become more obvious.
Scarcity Affects Investor Behavior
As investors realize that physical gold is becoming harder to find, their behavior changes dramatically. Demand for gold actually increases rather than slows down. Investors become more anxious to invest in gold and gold products, even though supply is dwindling.
This is a cycle that has been repeating itself for thousands of years. Physical gold is not something that makes a big splash until it is gone.
Selecting the Right Dealer is Important
In times when supply is an issue, where an investor buys their gold is just as important as what they are buying. Having access to a dealer who has a wide range of gold and silver products available for sale is vital.
AU Bullion offers investors a wide range of gold and silver products to choose from, helping them navigate uncertain times with clarity and confidence. Having access to physical gold and silver gives investors peace of mind during uncertain times.
