Metals Minute 74: Gold Price and China
Lots happening in the realm of precious metals; let’s dive in. Over the weekend, the world’s 4th largest port, and the 2nd largest in China, is closed due to virus-related concerns. The factories in this significant region of over 17 million people are also closed. While the port congestion in the United States is beginning to ease, fewer goods containers are being shipped. In other words, supply constraints and higher inflation are likely to continue.
The main chemical used in gold and silver mining and refining operations, sodium cyanide, is in tight supply and impacts physical metal availability. National mints worldwide also cite record demands, with the South African Mint seeing the highest demand in 32 years, and the Perth Mint in Australia referring to themselves as the corner bakery, with “…people scooping up whatever comes out of the oven.”
Much of this metals demand and supply chain difficulty was building already, but has been exacerbated by the Russia-Ukraine conflict. The world is rapidly moving in a direction that makes owning precious metals a necessity for financial stability.