US Gold and Silver Shortages: The Short and Long Term Effects

Gold and silver have gained recognition and reverence throughout history. There are many reasons to own or sell gold and silver. Unlike money, these metals have intrinsic value. When economies collapse and fiat money becomes valueless, governments resort to gold.

Do you have gold and silver pieces sitting idle somewhere? We will explain why this year could be the best time to sell gold and silver.

Rising Demand for Gold and Silver

There has been an unprecedented demand for gold and silver in recent times. The United States Mint reported that it could not meet the demand for bullion coins in 2020. According to the bureau, gold bullion coin sales rose 258 percent while silver coin demand increased 28 percent.

Even as prices continue rising, the Mint continues to sell gold and silver in large quantities. To make matters worse, the supply from mining companies is diminishing. Naturally, a combination of high demand and low supply increases prices, making this the right season to sell gold and silver.

Why are miners unable to satisfy today’s demand for precious metals? There are short-term and long-term reasons, as explained below.

COVID-19 Lockdowns and Travel Bans

The COVID-19 pandemic has stirred virtually all economic sectors, and it’s partially to blame for the diminishing supply of precious metals. First off, mining activity has decreased as companies strive to meet WHO’s guidelines on social distancing.

A country like South Africa, one of the top-ten gold producers, had more than 5,000 mine workers infected with coronavirus by mid-2020. Withdrawing thousands of miners from work adversely affected the production of precious metals. Such pandemic-related supply cuts occurred worldwide.

Bear Market in Metals

If you buy and sell gold and silver regularly, you must have noticed the continued decline in precious metal prices that began in 2012. It significantly hurt the profitability of mining companies across the world. As a result, lenders were hesitant to finance mining operations.

For mining companies to survive, they had to employ various cost-cutting measures. One of them was reducing their operating capital for exploration. While there are known mines with considerable reserves, reduced exploration brings uncertainty about future supply.

Declined Gold and Silver Discoveries

You will turn a heft profit if you sell gold and silver as the known deposits for the metals get depleted. Experts in the mining industry suggest that the world is running out of gold. The reason is apparent – we are extracting metals from the same mines without finding other discoveries.

Further, the amount of gold we can refine per ton of ore is also declining. According to studies, ore grade has dropped from 10 grams of gold per ton in the 1970s to 1.4 grams per ton today.

Increased Industrial Use of Gold and Silver

There are more uses of gold than just the fabrication of jewelry and bullion. This metal is essential in manufacturing vital components in computers, communication equipment, jet engines, space crafts, and many other high-value products.

Additionally, the industrial demand for silver has skyrocketed in the recent past. The World Silver Survey 2020 noted a 12 percent increase in silver demand in 2019.

This surge resulted from more investment in photovoltaic systems and electric vehicles, both of which require silver. Large scale electric equipment manufacturers like India and China are currently relying on imported silver after depleting their reserves.

Sell Gold and Silver Amid Supply Limitations

If you would like to make a decent income from your gems, sell gold and silver today. The prices are at an all-time high because mining companies have failed to meet the rising demand.

If you wish to sell gold and silver, get the best value at Doylestown Gold Exchange. We have won the Best Gold and Precious Metals Buyers award for seven years in a row. Our clients also voted us one of the Top Jewelry Stores for Engagement Rings and Wedding Bands.

Contact us to book an appointment.