Gold demand skyrockets, vendors struggle to keep up

The demand for gold is booming. As concerns surrounding COVID-19 and the world economy persist, investors are turning to precious metals en masse. However, suppliers have been struggling to ship gold bars, and prices are still out of sync.

The demand for gold increases

As Bloomberg reported, Australia’s largest gold refinery is increasing production amid rising demand. At the Perth Mint refinery, kilobar production has grown substantially, but deliveries have been difficult. The breakdown of global supply chains has caused headaches for many gold suppliers.

The problems have been significantly affecting global gold markets. Prices have been out of sync around the world. As BeInCrypto reported last week, New York gold futures have traded at a premium of $ 70 in some cases over London spot prices.

Gold providers hope this is simply a matter of short-term arbitrage.

“For every coin we make, whether it’s gold or silver, we could probably sell five or six,” Richard Hayes of the Perth Mint told Bloomberg.

However, the situation highlights gold’s inherent dependence on supply chain shocks. It is a problem that has been repeatedly pointed out by those who believe that Bitcoin BUY NOW it is a more suitable alternative for our digital world.

Bitcoin as digital Digital Gold ’

Bitcoin is often compared to gold. The comparison makes sense: Bitcoin one day hopes to be a store of value like gold is today.

However, the current COVID-19 crisis has made the limitations of gold clear. Markets move much faster today, and any supply problems can significantly affect prices. As a result, suppliers are backed by orders. Some would even argue that if supply chains are broken further, we could see the price of gold follow in the footsteps of oil.

The unique circumstances provide us with a strong case for Bitcoin. Since fears of a gold shortage materialized, cryptocurrency advocates have been quick to point out that physically-delivered ‘safe haven’ assets have limitations.

Bitcoin has recently shown a smooth correlation to gold. For much of March, the two asset classes closely followed. For every 1% increase in gold, Bitcoin would skyrocket 10%, as BeInCrypto reported last month. Unlike gold, the cryptocurrency market is also open 24 hours a day, 7 days a week, and arbitrage opportunities for Bitcoin are slim. This means that Bitcoin is exceptionally expendable compared to gold.

Gold demand may be on the rise, but some investors may be caught waiting for their precious metal for longer than they would like. Maybe this is the time when they should start seriously investigating Bitcoin.