Gold Refineries Address Supply Shortages Amidst Crisis: Surge in Digital Tokens

Amidst the turmoil caused by the coronavirus crisis, gold refiners have been working tirelessly to address severe supply shortages resulting from market disruptions. Notably, there has been a noticeable uptick in interest surrounding digital tokens backed by gold. 

As Q1 of 2020 drew to a close, the gold market experienced an unprecedented “historic squeeze.” This surge in demand for the precious metal was fueled by pervasive economic uncertainty. Concurrently, trading routes and refineries faced closures and disruptions, further exacerbating the supply shortages.

In response to shortages, Australia’s largest gold refinery has significantly boosted production to meet the increased demand for gold from Western buyers by shipping gold bars to New York. 

Additionally, in Switzerland, three of the world’s largest gold refineries are gradually reopening after having to shut down due to strict lockdown measures.

In recent times, there has been a notable surge of interest in trading gold-backed tokens within the digital assets markets. This trend has been particularly exemplified by the success of Tether Gold, which emerged as the leading gold-backed token in terms of trading volume following its launch in late January 2020. 

Throughout the first quarter of 2020, the hourly trading volume for this innovative token displayed significant volatility, ranging from a few hundred dollars to over $1 million, indicating a dynamic and active market for this asset.

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