With the coronavirus pandemic and the steep correction in the equities markets earlier in the year, investors are flocking towards safe-haven assets such as Gold and Silver. The market is seeing precious metal demand at multi-year highs.
With the coronavirus lockdowns spreading worldwide, the supply chain of precious metals has been severely impacted. Many mining companies halted operations, while refineries and mints paused production. Also, logistics and transportation companies limited routes.
The combination of high demand and a stressed supply chain has caused precious metals premiums to spike upwards. As the world slowly returns to normal, ImpTrax expects the precious metals supply chain to ease up, and for precious metals premiums to gradually return back to normal levels, however, we expect short term demand will remain high; therefore, prices will continue to face uptick pressure.
With every change comes an opportunity. Currently, Gold is trading at a premium.