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7 May, 2020 11:40

Demand physical gold & avoid paper gold market ‘scam’ – metals expert to RT’s Keiser Report

Demand physical gold & avoid paper gold market ‘scam’ – metals expert to RT’s Keiser Report

The gold market is set to hit new highs this year amid the Covid-19 outbreak while banks, facing delivery troubles, cannot fulfil real demand for the precious metal.

RT’s Max Keiser sat in with Craig Hemke of TFMetalsReport.com to discuss the future of gold prices. The analyst says that while the metal has already reached multi-year highs, the pandemic has created more conditions to boost investment into it. 

Investors are currently scrambling for physical gold due to delivery issues as miners and refineries had to shut down over the virus outbreak. At the same time, people started to figure out that the paper gold market is a “scam,” and this could be another factor driving prices up.

“Banks took the same ounce of gold and sold it over, over and over because rarely anybody takes delivery,” Craig Hemke said. “Eventually you have a hundred different parties that own that same ounce.”

This could set the ground for the opposite to what we saw in crude oil, when no one wanted to buy WTI contracts, sending US oil prices into negative territory. The lack of physical gold can lead to a situation when everybody wants to buy it, but no one wants to sell. 

“So you get an offer-less market where everybody is bidding and instead of price plummeting infinitely… the price of gold is going other way,” Hemke told RT’s Keiser Report.

For more stories on economy & finance visit RT's business section