These days there has been a lot of debate about a supposed “soft landing”. We’re not going to jump into that rabbit hole. Instead, let’s delve into these metals! Let’s start with the safe one, gold.
Pay Attention to These Industries: Technology, Nuclear Power
Investing in gold in the asset markets is a known way to diversify and reduce risk within a portfolio. However, jewellery happens to be the largest source of gold demand, sitting at around 50%. Gold is also prominently used in technology, with 80% of the gold used within the sector being for electronics.
As for silver, the metal is also used in jewellery. However, the biggest market happens to be industrial fabrication. Let’s define that term. First of all, fabrication is used during the manufacturing process, but the definitions of the two processes are different.
Fabrication involves the assembly of standard or specialised parts to form parts of a product to be used in the manufacture of the finished piece. Manufacturing, however, is a start to finish movement, from the creation of parts through to the final assembly to produce a finished product, often using areas of fabrication within the manufacturing process.
Alpha Manufacturing UK
Over 50% of silver demand in the past five years was used for industry. Like gold, silver is used in electronics. But there are other areas such as solar panels, chemical production, the automotive industry, and the process of brazen and soldering (done to join metals together).
As for uranium, the main use to be aware of is for nuclear energy. Around 10% of the world’s electricity is generated from uranium in nuclear reactors. As the world continues to look for clean energy sources, there has been a renewed focus on nuclear power and by association, uranium.
Know the Leading Producers: Top Countries
The top three gold producers are China, Australia, and Russia, in that order. There’s a bit of a dropoff, then it’s Canada and the United States.
Mexico is the largest silver producer by quite a bit (1.6 times China in 2021). China and Peru are the next before there’s a dropoff to Chile, Russia, Poland, and Australia.
It’s even more lopsided with uranium. Kazakhstan produced nearly 3 times more than second-place Canada in 2022. Afterwards, there’s Namibia, Australia, and Uzbekistan.
To learn the key factors to know about US-Germany trade, read our previous Macro Framework post.