“Going forward, there are – and will continue to be – three primary drivers of global physical gold (and silver) demand. During certain times in the past only one or two of these elements provided most of the momentum. However, as we move into 2019, and for possibly the next 5-10 years, all three will be in play. They will operate synergistically to consistently motivate increased precious metals’ buying around the globe. This will happen, even as meeting that demand with sufficient new supply becomes problematic.”
USAGOLD note: In times past central banks stepped-in to fill the supply-demand deficit, but central banks are now net buyers of the metal and that is unlikely to change under current economic circumstances. In addition, filling that gap from the perspective of global mine production could be problematic as well – particularly in the event of another protracted, full-out financial crisis. China (the #1 producer) and Russia (the #3 producer) both channel their production into domestic reserves. South Africa, once the largest producer, has seen their production dwindle in recent years to where it is now the seventh largest producer. That leaves the United States, Canada and Australia as the primary sources for gold metal. Their combined production at 725 tonnes, however, represents only 18% of annual global demand (+/-4100 tonnes). The potential imbalance is the often overlooked elephant in the gold room.