If one is to believe the current reports coming from the U.K, it is apparent that getting a hold of physical gold is not as easy as some people might assume.
This is according to Peter Hambro, the Co-founder and Chairman of Petropavlovsk. He says that it is incessantly becoming harder to satisfy the swelling demand for gold in Eurasia where people prefer physical gold.(Source: Bloomberg) Due to these circumstances, the British are importing the yellow metal just so that they can export it.(Source: Gold Seek) London has too little of the actual precious metal that their only option with the changing market demands is to import from the U.S.A and other countries with a rich supply of the precious metal.(Source: Bloomberg)
This scenario exposes the weaknesses of the virtual paper gold market that is apparently based more on promises and not actual physical delivery. There is more virtual gold floating around in commodity markets than there is actual physical gold for one to buy and hold. Due to this situation, folks are left wondering what would happen if this paper market was hit by an unfortunate occurrence like a stock market crash or even worse, a global economic collapse? It would emerge that the valuable pieces of paper representing gold are worthless, which is why people would rather hold gold bars, gold coins or any kind of gold bullion in their vaults, rather than keep paper gold that is susceptible to market changes. These fears make virtual gold seem like a big mistake for traders who want a reliable way of protecting their wealth with real assets.
In response to the supply crisis stewing in the markets, borrowing costs for gold have risen marginally in the past weeks. This is happening mainly because of large volumes of the precious metal are being delivered to Switzerland. The intention is that it will be melted and shipping to India and China where the demand for physical gold continues to rise.(Source: Silver Doctors)
The gold supply is stretched very thin and there is continued pressure from Eurasian buyers who would rather buy physical gold and not the paper promises. You might wonder why the price of gold is not rising, but this is simply because the metal is subject to virtual trading forces that are disconnected from the realities of physical gold. This is a very tricky situation for gold buyers who fear losses owed to high borrowing rates that are overshadowed by unchanging physical gold prices.
In the long run, though, it is better for people to protect their wealth with some form of physical gold whose value in not in question. If you would like to make such an investment, you can speak to a Senior Gold and Silver Specialist from Capital Gold Group. They specialize in physical precious metals and would be more than happy to explain your options. Our company is reliable and has been a trusted precious metals firm for over a decade.
Capital Gold Group, Inc will sell you real value in physical gold, as opposed to promises written on pieces of paper, whose value might just vanish with an economic crisis. With a potential economic crisis looming, it is certainly better to store your wealth in something tangible and not promises.
Capital Gold Group Call 1(800)510-9594, or visit us online at startwithgold.com.
DOWNLOAD YOUR FREE DEFINITIVE GOLD GUIDE
The Definitive Gold Guide:
On January 8, 1835, President Andrew Jackson proclaimed that the last installment of our national debt had been paid, and that the United States was debt free! This was the only time in American history that the U.S. had no debt.