1st American Reserve Blog

1st American Reserve thinks this is an article you absolutely should read:
According to an article in last Thursday’s Wall Street Journal (“Scramble for Gold Redraws Market’s Map,” June 11), gold imports to New York from Switzerland and elsewhere have been massive over the last three months. As we’ve written here in the past, one major factor in the current gold shortage stems from the fact that major Swiss gold refiners were only sporadically open from March through May due to coronavirus fears - three of the four major gold refiners were in the southern, Italian-speaking Swiss cantons, near northern Italy, which was hard hit by the coronavirus.

The Comex division of the New York Mercantile Exchange is required to hold physical gold to back each new share of gold ETFs that investors buy. Due to stocks falling sharply, demand for gold ETFs nearly quadrupled. Gold in Comex vaults within 150 miles of New York City rose from about eight million Troy ounces (250 metric tons) to almost 30 million troy ounces of gold (over 900 metric tons), according to FactSet. The Journal says that rise in gold vaults is equal to nine fully-loaded Boeing 737-700 airliners. Since commercial flights out of Switzerland were limited during those months, the Journal said private charters by logistic firms flew that gold from Europe to New York.

Stocks are now going up and down rapidly – more rapidly than at any time since the 89% decline from 1929 to 1932, followed by a rapid 93% recovery during the summer of 1932.  So far, the year 2020 is a year of unprecedented volatility – the widest price swings since 1929-1933. That’s all the more reason why investors are turning to gold – the only investment that went up during the troubled 1930s.  To learn more about how to properly invest in gold, call our friendly and experienced account representatives that are the heart of Team Mike!