The last few months have bolstered the price of the precious metal gold as governments worldwide have created tremendous amounts of debt and inflation. For instance, the value of gold per ounce jumped over $2k during the first week of August. Meanwhile, similarly to the physical counterparts, two blockchain tokens that claim to be backed by gold have seen significant demand and small premiums. While a handful of other ‘digital gold’ crypto coins have seen market valuations shudder this year.
On August 3, 2020, the price of a single ounce of .999 gold spiked to $2,045 per unit. Since then, the precious metal per ounce lost -5.6% in value during the course of the month.
Experts believe that gold’s value could jump to $3k per ounce by the year’s end if politicians and central banks continue to create economic disasters. While gold has increased considerably this year, it’s been growing much harder to obtain physical bullion, gold coins, and bars unless you buy in bulk.
The infamous gold bug and analyst Egon von Greyerz has warned investors on various occasions that in recent months that there is a “massive shortage of physical gold.” Especially when it comes to traditional gold futures markets and the London bullion market (LBMA).
The LBMA is one of the largest wholesale over-the-counter markets for gold and silver worldwide.
“There is a massive shortage of physical gold in the futures markets and LBMA system. As gold goes up and the holders of gold ask for physical delivery, there will be no gold available to settle the paper claims,” the analyst stressed.
Another sector that has been growing fervently is the demand for gold-backed cryptocurrencies and two of these tokens are fetching a premium. During the last two weeks, the gold-backed tokens PAXG, and XAUT have seen consistent premiums over the spot price of gold between 0.5% to 3%.