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February 15, 2010 – Precious metal supply and demand have been the biggest drivers of prices for the past decade. This cycle can be seen in the climbing prices for metals, which today stand at $1,100.40 for gold, $15.53 per ounce for silver and $1,511.00 per ounce for platinum. Demand for these beautiful metals continues to rise, making them highly desirable investment commodities.

While demand for precious metals is spread throughout the world, East Asia, the Indian sub-continent and the Middle East accounted for nearly 70% of the demand as recently as 2008, and just five countries (China, India, the United States, Turkey and Italy) are responsible for 55% of the total for gold. This incredible demand for metals is centered primarily on jewelry, investment and industrial applications.

Jewelry consists of nearly two-thirds of all gold demand and a high percentage of silver and platinum as well. While the US is the biggest retail market for jewelry, India has the largest percentage of the market, with around 25% of all pieces being bought in the country. With its reasonable prices, silver continues to be an enormous part of the jewelry market, and platinum is gaining a tremendous number of customers because while costly, it provides the best durability and beauty that is comparable with gold.

Precious metals play an important part in a wide variety of applications for the industrial sector. Platinum and palladium are integral parts of emission controls for the automotive industry. Gold and silver are used extensively in consumer electronics. Overall, industrial, medical and dental uses account for over 10% of all gold demand.

Investment demand for precious metals drive the availability for each of the other uses. Metals are highly desired investment commodities as traders leverage the high demand that exists with limited availability to drive up prices. With their low supply and high demand, metals make excellent investments with strong profit potential. 

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Danny Burns

Senior Staff Writer - Precious-Metal.org