Demand for Physical Precious Metals Surge Due to Fears about Disruptions in The Global Supply Chain

The comments below are an edited and abridged synopsis of an article by SRSrocco

Demand for gold and silver has recently surged due to investor concerns about a disruption to the global supply chain. There is already a massive slowdown in China’s oil demand; official reports show a 20% reduction in oil consumption.

Demand for Physical Precious Metals Surge Due to Fears about Disruptions in The Global Supply Chain | BullionBuzz
Gold vein seen in rock.

Assuming China’s total daily oil consumption is down 7 million barrels (charts included), that is bad news for the global economy and global supply chain. This is why we see a surge in physical precious metals purchases recently. And, if the situation in China isn’t resolved in the next one or two months, we could easily see supply chain disruptions throughout the world.

With demand for physical precious metals picking up considerably recently, this may not be a short-term phenomenon. Rather, if the global supply chain becomes more problematic as time goes by, there could be a huge surge in demand for physical precious metals.

It’s important to own a variety of sizes of physical precious metals. For example, one-ounce silver coins/rounds are wise to keep for trading purposes. While a quarter-ounce of silver may only be worth about $4.50 currently, what happens if the silver price rises significantly in the future? What happens when silver goes back to $50 an ounce? Owning some 1/10th ounce silver rounds may also be smart.

The world is underestimating the situation unfolding in China. Watch over the next few weeks to see if the global supply chain comes under more stress. If the situation continues to worsen, it will cause more stress in the financial markets and economy, forcing more investors into owning physical precious metals.

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