Gold prices have been climbing, causing a sharp increase in demand from Japan’s retail investors leading to a massive boom. Global economic uncertainty is an increasingly powerful actor in this phenomenon. Traders are rushing to safe-haven assets such as gold for safety. Japan’s retailers of rarer metals like gold and silver are dealing with historic levels of demand, resulting in impossible-to-miss bullion shortages around the country.
A new economic reality that breeds an environment of fear for investors. As a result, they are increasingly looking for safe-haven asset classes to store their wealth. Across Japan’s entrepreneurial society, people have sought stability in gold long term as a sure way to hold value. One key driver that has aggravated this trend is the weakening yen. Residents are understandably interested in minimizing their exposure to currency risk. Analysts say that a weak yen and increasing gold prices would spur investors to purchase gold. Unfortunately, that trend appears set to continue over the foreseeable future.
As demand for gold has surged, many gold dealers have faced challenges keeping up with inventory. It’s gotten so crazy for some retailers that they’ve stopped selling 50-gram gold bars entirely from being inundated with orders. Gold bar production is unable to meet the current demand. Unfortunately, that means many of their customers are still left without this much coveted and unrealized asset.
This shortage of bullion in Japan points to a larger trend that has been seen all around the world. Investors are pouring into gold like never before with geopolitical tensions rising and economic collapse on the near horizon. More people view gold investments as a wise investment move. They’re betting on even higher gold prices, particularly during these tumultuous financial markets.
The reality has created a drumbeat of demands for a ramp up in production capacity from the dealer network to keep up with the exploding demand. There’s still the challenge of being able to source raw materials and scale up operations quickly enough to meet the crisis. As dealers work tirelessly to replenish their stocks, customers are left waiting for new shipments of gold bars and coins.