In Gold We Trust: Physical Supply Never Been Tighter

In Gold We Trust Cut

Alex Stanczyk, Chief Market Strategist for the Anglo Far East  group of companies recently returned from a trip to Switzerland where he confirmed that the distribution of gold from west to east is not slowing down whatsoever. Refineries in Switzerland are still working 24 hours a day to cast bars for china, sometimes having difficulty sourcing the gold…

“We met with the managing director of the largest refinery in Switzerland and spent about two hours talking to him. We learned some very interesting things. What’s going on in the gold market as far as the price, is I think very counter intuitive. Everybody understands, knows and believes the price should be higher than it is, but it isn’t. There’s confusion in the marketplace, and there are two reactions; the reaction in the west is fear, confusion and uncertainty; the reaction in the east is buying.”

 He indicated the price didn’t make sense because he has got so much fabrication demand. They put on three shifts, they’re working 24 hours a day and originally he thought that would wind down at some point. Well, they’ve been doing it all year. Every time he thinks it’s going to slow down, he gets more orders, more orders, more orders. They have expanded the plant to where it almost doubles their capacity. 70 % of their kilobar fabrication is going to China, at a pace of 10 tons a week. That’s from one refinery, now remember there are 4 of these big ones [refineries] in Switzerland.

…At this Swiss refinery there have been several times this year on which they were unable to source gold, this shocked me. They’re bringing in good delivery bars, scrap and dore from the mines, basically all they can get their hands on. This gentleman has been in the business for 37 years, he was there during the last bull market in the late seventies. I asked him when was the last time this has happened, that he was unable to source gold, he said never. And I clarified it, I asked: let me make sure if I understand what you’re saying to me, in the last 37 years you’ve worked in the gold industry this has never happened? He said: this has never happened.”

In Gold We Trust: Physical Supply Never Been Tighter

Categories: Gold News Tags:
  1. No comments yet.
  1. No trackbacks yet.