Japan’s retail investors are chasing their own gold rush. Surging inflation and worldwide geopolitical instability are driving their need for safe haven assets. With gold prices reaching a seven-year high in recent weeks, many investors have looked to the safe haven of this age-old store of value. The increase in demand has created major backlogs at Japan’s precious metals dealers. As a consequence, it has gotten much harder to find 50-gram gold bars.
The current global economic uncertainty is increasing demands and fears among investors, leading to a flight to safety with gold as a stronghold investment. Signature Global Advisors’ analysts further point out that the recent volatility experienced in financial markets has increased gold’s allure. With the yen continuing to weaken, there is a rising interest among Japanese citizens in protecting their wealth. This trend has fueled a nearly 60% surge in gold purchases.
Not to mention that dealers all over Japan have been caught flat-footed by the sudden tsunami of underground demand for 50-gram bars. As a consequence, some have chosen to halt sales for the time being. That scarcity wasn’t an isolated occurrence, it was a phenomenon that has swept across nearly all retail outlets in the precious metals sector. The supply chain for producing these popular gold bars is struggling, unable to match the increased appetite from investors anticipating further price hikes.
The weak yen has further accelerated the trend towards safe haven investments. As the currency continues to lose its value, people are looking for ways to protect their wealth from an impending surge in inflation and a looming recession. Gold is universally considered a reliable hedge against unexpected risks. Its price trajectory as of late shows that as many folks expect more upward movement on price as down.
Even precious metals dealers have been impacted by continuing bullion shortages. This trend demonstrates the heightened appeal of gold in Japan’s market. This global dash for safe haven assets scenario is likely to continue as long as the global economic outlook continues to be tenuous. Many investors are closely monitoring market trends, hoping to secure gold before prices escalate even further.