At a time when America’s purchases of other overseas goods have ebbed, imports of gold, silver and other precious metals are surging, according to a USA TODAY analysis of the latest Census trade data.
The value of precious metals pouring into the country hit a 19-year high last year, a $55 billion influx that doubled the volume of 2019. Analysts and traders say the trend reflects rising demand among purchasers that range from Wall Street investment funds to ordinary people buying up bullion.
“We’ve sold a lot, and we buy a lot in return,” said Glenn Sorgenstein, a Santa Monica, California, coin shop owner who’s gone from 100 to 200 daily phone inquiries to as many as 1,000. “There hasn’t been a period over the last year where I could say business has slowed down.”
Hot items include bullion coins such as American Eagle coins, made by the U.S. Mint, and Canadian Maple Leaf coins, made by the Royal Canadian Mint, he said.
“Nonmonetary gold”— a category that excludes gold bars owned by central banks— accounted for about two-thirds of total U.S. imports of precious metals in 2020. The Census Bureau’s count for other precious metals includes silver, platinum, palladium and more obscure sources such as ruthenium and iridium.
In just the first three months after the United States entered lockdown, the nation imported $23 billion in precious metals, blowing past the total for all of 2019. Although that rate slid later in the year, imports remained higher than pre-pandemic levels every month.
Imports of most other categories of goods declined during the year as the pandemic recession set in, data show. Total U.S. imports of goods fell by about 7% from the year before.
More:How COVID-19 changed what Americans buy
Experts say the surge in imports of precious metals in 2020 reflects people’s lack of confidence in the government’s response to the pandemic, resulting in an increase in risk aversion.
According to a survey done by the Pew Research Center late last year, public trust in the federal government remained so low that only one in five Americans said they trust the federal government to do what is right either just about always or most of the time.
“The U.S. stock market fell very dramatically last spring. That’s a sign that people are worried about the future,” said David Dollar, a senior fellow at the Brookings Institution, a think tank in Washington D.C. “They don’t know how serious the pandemic is going to be. People were scared, and they wanted to put some of their assets into a safe haven.”
Investments in precious metals, especially gold, have a long history of retaining their values and can be collected in coins and bars or held in “physically-backed” exchange-traded funds, according to Suki Copper, precious metals analyst at Standard Chartered Bank.
Oshri Reuven, owner of Global Gold & Silver, a buyer and seller of precious metals with three locations in New York City, said the company’s gold sales have exceeded pre-pandemic levels since his stores reopened from the COVID-19 shutdown in June.
The price of gold per ounce increased at that time, and so did the demand.
“Normally, people wanted to buy one gold coin, and now, they want to buy four gold coins,” Reuven said.
Reuven said one elderly customer ordered a collection of four gold coins for his granddaughter and paid about $8,000.
“He’s worried that he’s going to be sick from this pandemic or maybe not going to survive the pandemic,” Reuven said. “So, he wants to leave his granddaughter something for security for the future. So he buys for her a collection of gold coins so she can have something when he is gone.”
The earliest months of COVID-19’s rapid growth in the United States brought the biggest burst in shipments of gold, Census monthly trade data shows.
“It’s concentrated very much in the spring of 2020 when uncertainty was at the maximum,” Dollar, the Brookings Institution fellow, said. “And then you pass those first round of stimulus checks. That calms the stock market and maintains people’s income. Then gold imports returned back toward normal.”
More:Americans sitting on record cash savings amid pandemic
Global demand for nonmonetary gold comes primarily from two sources: jewelry consumption in Asian countries and investment interests in western countries, according to Louise Street, senior markets analyst at the World Gold Council. Gold and other precious metals also have large industrial uses including the manufacturing of electronics, automobiles, and medical equipment.
While jewelry demand fell in 2020, Street said, investment demand grew. At the same time, mine sites around the world closed due to COVID-19 shutdowns, limiting supplies.
“The tight supply conditions and the strong investment flows are what combined to push the price up,” said Street.
Last May, $8.8 billion of nonmonetary gold shipped to the U.S. from the rest of the world, more than 10 times the monthly average for 2019, according to Census data.
Some of the growth in import value was linked to gold prices, which rose 17% in the first half of 2020. But the sheer physical volume of metals arriving from overseas played an essential role.
Consider the influx from Switzerland, a global hub for the movement of precious metals.
In the first five months of last year, Switzerland shipped about 286 tons of gold to the U.S. — more than it had in all of the preceding 10 years combined, according to Standard Chartered Bank.
Cooper, the precious metals analysts, said Swiss exporters shifted their focus from China, India and Turkey, where demand for jewelry was down due to the pandemic, to a more lucrative market.
“Shipments to Asian countries started to fall and some months were close to zero,” Cooper said. “The shipments going into the U.S. were substantially higher because we started seeing such a large increase in investment demand.”
Demand from both investors and jewelry buyers created a successful year for one gold jewelry designer based in New York City.
Al Sandimirova, founder of Automic Gold, said the company’s jewelry sales doubled in 2020 compared to 2019, reaching $3.5 million. The growth continued in 2021, with sales for the first month in 2021 four times greater than the previous January.
“Gold jewelry is not just fashion. It has a second side, investment,” Sandimirova said. “Gold jewelry pieces can cost anywhere from $100 to $1,000. People of all economic backgrounds can invest in them.”
And, today’s new normal of working from home makes jewelry more important— the only element of flash that can be seen during a video meeting. “When I’m in a Zoom meeting, I just wear my comfort pants, a shirt, and a few gold chains,” Sandimirova said.
“You could only see me from my chest up. So, what’s the point of dress-up?”
On the West Coast, Sorgenstein, the owner of Wilshire Coin in Santa Monica, said wholesale and retail sales have both been up about 50% last year since the pandemic started.
Coins as well as bars made with precious metals are popular among investors. “If you have a product, you’re in a really good position right now because there’s a lot of people who want that product,” he said.
Sorgenstein said he has noticed a change in who’s buying since the pandemic began.
“Precious metals have typically been purchased and held by older white males, but now we’re seeing everybody,” he said. “There’s a lot of young people who have educated themselves about the value or lack of value in the U.S. dollar and how they can retain value by owning precious metals.”
Miguel Valenzuela is one of those young buyers.
On a sunny Tuesday afternoon in September, Valenzuela withdrew $2,000 from his savings account, placed the cash in a gym bag, and walked into a coin shop in Los Angeles. It was more cash than he’d ever withdrawn.
The 27-year-old Ph.D. candidate at the University of Chicago walked out of the store 45 minutes later, the new owner of a gold Canadian Maple Leaf and a silver coin.
“It was like a new thing I’m doing. So, it was definitely a little nerve-wracking, at the same time, exciting,” said Valenzuela.
Valenzuela took more than a week researching the value of various coins before making his first purchase. He called six shops near his house to ask if they had a Canadian Maple Leaf. He had bought some stocks through Robinhood, the online trading app, before the pandemic but has found the market too risky since.
“I couldn’t take the volatility, so I was like, ‘I want something that’s like faith and I know is going to maintain its value,’” Valenzuela said. “So, the first thing I thought was gold. And that’s what led me to silver.”
Multiple rounds of federal stimulus checks also fueled his motivation in investing precious metals, Valenzuela said. He had extra money and was worried about inflation. So far, Valenzuela has collected 75 ounces of gold and silver. He described his bullion collection as “a safety net”: He can grab a couple of coins and sell them for any family emergency.
When asked what he would do if there are more stimulus checks later this year, Valenzuela said, “Honestly, I’m going to go buy coins with that.”
METHODS: For its analysis, USA TODAY used the latest trade data published by the U.S. Census Bureau and calculated the trade value for “nonmonetary gold” and “other precious metals” based on the 10-digit Harmonized Tariff Schedule Codes for related goods.
Dian Zhang is a data reporter with USA TODAY and can be reached at [email protected] or @dian_zhang_