Gold is a very versatile metal, one that has many uses. This means it’s heavily desired in many sectors, including; jewelry, technology, investments, & by central banks. It also has many sectors that contribute to its supply. These include; mining production, recycling and producer hedging. All of these sectors help to contribute to the overall supply and demand that we see for the metal.
While the pandemic brought gold prices to new highs, it also had a strong impact on its supply & demand. The overall demand in the 4th quarter of 2020 for the metal was down a staggering 28% year over year. This is the lowest level its seen since 2009!
2020 has seen economic struggles, inflated gold prices, and constant lockdowns. Because of that, gold jewelry demand was down 13%, and technology dropped by 7% in Q4 y-o-y. While the demand for bars and coins was up 10% in Q4 y-o-y, it’s not enough to counter the effects of Covid-19.
The supply chain was also impacted heavily, and for the first time since 2017, total supply fell by 4%. Many mining companies were anxious to cash in on the soaring gold prices in 2020. However, it was simply made more difficult due to numerous Covid-19 restrictions. Despite the demand dropping more heavily than supply, the price of gold defied basic economics and rose to record highs!
Many are seeing signs that the demand for gold will only continue to rise in 2021. However, the facts are that gold prices are on a downward trend, and that now may still be the highest point that gold will be for the foreseeable future. For many, that uncertainty is not worth gambling on when there are other investments that are guaranteed to make more money.
You can also bring it in to our location, where we’ll be happy to tell you the real value of your items! We’re proud to have the highest prices based on current market trends! So while gold prices may see drops in value in the future, our prices will always remain high and at the top!