Gold has always been viewed as a great hedge against inflation, wars, and other crises. Russia’s invasion of Ukraine has dominated the news cycle and it has sent the price of a lot of commodities high. The world has been reeling from the economic repercussions of the war. The conflict has driven the price of everything from wheat, sunflower oil, and metals to record highs. This has fuelled the fears of inflation and a drop in the global economy. This has been driving more buyers of gold from Vienna to Australia to seek the safety of gold.
The price of gold has surged above 10% since the beginning of the year which has been a boon for gold dealers. Business is not only good because of investors flocking to buy gold to safeguard their wealth but ordinary people have had to turn to the gold they already own to get through the rough economic patch. This is likely to continue as long as the conflict continues. The sale of gold has more than tripled its normal level. The situation couldn’t have come at a better time; a lot of gold dealers were only starting to recover from the effects of the Coronavirus. Once again, supply chains are under threat and gold buyers are having to wait long periods to deliver their customer’s gold. More people seem to be bracing themselves for a worst-case scenario and are being prudent with their investments.
The high gold demand comes on the heels of a strong gold buying year. According to the World Gold Council, the demand for gold bars and coins rose to more than 1,124 tons in 2021. That was the highest that gold has been in over a decade.
The current demand for physical gold has caused an already high premium on a lot of the retail buyers’ favorites has gone even higher as a result of the scarcity of the precious metal. Retail gold buyers Melbourne have been reported to be willing to add as much as $100 on top of the spot price of gold. Premiums have also risen to about 25% and are expected to go even higher because of the war and the sanctions on Russia. Sanctions meant to hurt Russia and force Putin to withdraw and leave Ukraine won’t just hurt Russia and its people but it will hurt the world economy as well. Russians and a lot of other people around the world are looking at the safety of having their wealth tied up in precious metals like gold. Gold in all its forms is the ultimate backup plan and the best thing about it is that is easy to get into the gold market.
There are more gold buyers Melbourne now than ever. They cater to jewellery buyers, cash-for-gold buyers, and your usual gold bullion dealers. There are more people who now know that they can cash in their gold to take care of their immediate needs for cash. They are selling gold jewellery as much as investors with gold sell their gold bullion. This is likely to be the case as long as Russia shows no signs of withdrawing its troops and more western countries continue to condemn Putin’s offensive against Ukraine.
