Gold/Silver: The Role of Mining Supply

From cmegroup.com Watch this video at https://www.metalsmine.com/news/1170664-goldsilver-the-role-of-mining-supply.

Analysis of gold and silver often focuses on demand-side factors, such as the impact of U.S. short-term interest rates and the U.S. dollar. While these are important short-term drivers, mining supply can also be an important driver of longer-term price trends. In recent years, mining supply for gold and silver has been on a downtrend. Gold mining supply fell 7% between 2016 and 2021. Meanwhile, silver mining supply has fallen even more sharply, declining 8.5% during that period. A reduction in new supplies may be part of the reason why precious metals prices rose over the last five years. There appears to be a strong inverse relationship between the annual growth rate in the total amount of precious metals supply and movements in precious metals prices. Over the past half century, years in which gold mining supply increased tended to coincide with declines in both gold and silver prices. The same was true when silver mining supply increased.