There are strong cultural ties to seeking precious metal as a hedge by individuals. Indians and the Chinese are used to huge ornate weddings and have a strong sense the jewelry bears a dual purpose. It's possible the last fifteen years of the diaspora has acculturated the precious metals practices of their cultures into America.
Real hedge doesn't go to jewelry. But the lower grade gold and silver has to come from the same feedstock. So the localised effect would be felt in the investment community because some of the bars are going out the door to metalworking not to another vault.
I'm less sure its indicative overall of risk these days. Real LME type trade is online. There is no shortage of metal worldwide is there? I thought most central banks de-gilded over the last decades anyway.
Real hedge doesn't go to jewelry. But the lower grade gold and silver has to come from the same feedstock. So the localised effect would be felt in the investment community because some of the bars are going out the door to metalworking not to another vault.
I'm less sure its indicative overall of risk these days. Real LME type trade is online. There is no shortage of metal worldwide is there? I thought most central banks de-gilded over the last decades anyway.