(Bloomberg) — The scramble to jump on one of the hottest gold trades in years — by shipping bullion to New York — has sparked what may be one of the largest ever physical transfers of the metal.“The flows into New York are unprecedented,” said Allan Finn, global commodities director at logistics and security provider Malca-Amit. His company’s teams in New York have been working 24 hours a day to cope with demand while navigating lockdowns, flight disruptions and social distancing.Gold flooded into the U.S. in recent months as traders rushed to profit from an arbitrage caused by dislocations in the market triggered by the pandemic. Since late March, some 550 tons of gold — worth $30 billion at today’s price and roughly equal to global mine output in the period — have been added to Comex warehouse stockpiles. Hundreds of tons of that was imported.While tens of billions of dollars of gold change hands every day in financial markets, a much smaller amount tends to physically move between vaults in trading hubs like London, Zurich and New York.But that started to change as the Covid-19 crisis affected the supply chain. When planes were grounded and Swiss refineries closed in late March, traders were worried they wouldn’t be able to get gold to New York in time to deliver against futures contracts. That caused futures, which typically trade in lockstep with the London spot price, to soar to a premium of as much as $70 an ounce.That created an opportunity for enterprising traders: buy gold somewhere in the world at the spot price, sell futures, and benefit from the difference by shipping the metal to New York.The scale of the trade has been revealed in exchange reports, import and export data and comments from some of the leading precious metals shipping and vaulting companies. On Thursday, traders declared their intent to deliver 2.8 million ounces of gold against the June Comex contract, the largest daily delivery notice in bourse data going back to 1994.Swiss gold exports to the U.S. have surged, reaching 111.7 tons in April, the highest on record. American import data for April isn’t yet available, but already in March gold imports topped $3 billion, according to the Census Bureau, the highest in at least a decade. Refineries as far away as Australia have ramped up output of kilobars — the form typically delivered on the Comex — to ship to New York.For Brink’s Ltd. Managing Director Mark Woolley, the spike in demand to ship gold to New York has been unlike anything he’s seen in 20 years in the market.“The amount of metal that we’ve successfully moved into New York is pretty significant,” he said Thursday on a webinar hosted by the London Bullion Market Association. “It’s probably not far off the total amount of metal that’s been mined in this period.”CME Group Inc., which owns Comex, responded to the recent market dislocation by introducing a new contract allowing the delivery of 400-ounce bars, the type traded in London. Still, “other changes need to be at least considered,” according to LBMA Chairman Paul Fisher.The enormous movement of gold has been a boon for logistics companies, but also a challenge. Not only have passenger flights — on which shipments are typically transported — been grounded, but New York City, where many Comex warehouses are located, has also been a hotspot for the virus.To deal with flows, Loomis International U.K. opened up additional vault capacity. Malca-Amit considered using airports in Boston and Philadelphia, but hasn’t needed to yet, Finn said.While large volumes and virus-related restrictions at vaults and airports caused some delivery delays, much of the spike in the premium for futures contracts in March — which left some banks nursing sizable losses — was driven by perception rather than reality, Finn said.“My own personal opinion is that any assessment on the inability to get gold in was ill-informed at the time and was made on assumptions rather than fact,” he said.Still, the bonanza for precious metals shippers may last a while. Large deliveries have seen June Comex futures drop to a discount to spot prices this week, but later dated futures are still at a premium. And as investor interest in other precious metals picked up, futures for silver and platinum have also traded at premiums to spot.“The guys in New York have done a great job,” said Brian Hayward, head of Loomis International U.K. “We’re seeing a lot of silver head that way right now.”(Updates with LBMA chairman’s comment below second chart. An earlier version corrected the Y axis in the first chart)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Tyson Foods (NYSE: TSN) is temporarily shutting down its Iowa pork factory due to the transmission of novel coronavirus (COVID-19) at the facility, Reuters reported Thursday.What Happened According to Iowa state officials, at least 555 workers at the Storm Lake plant have tested positive for COVID-19 so far, as reported by Reuters. The positive workers account for 22% of the total workforce at the facility.The company plans on resuming production next week, after "additional deep cleaning and sanitizing of the entire facility."President Donald Trump last month ordered meat-processing plants to stay open during the pandemic to ensure food supply across the United States.Nevertheless, companies including Tyson, WH Group Ltd. (OTC: WHGLY) subsidiary Smithfield Foods, and JBS SA (OTC: JBSAY), had to shutter 20 facilities across the country in April due to coronavirus outbreaks among workers.Why It Matters Meat companies have faced criticism for lack of worker safety measures during the pandemic.According to data from the Food & Environment Reporting Network, at least 18,437 meatpacking workers in the U.S. have tested positive for the coronavirus as of Thursday, and 67 of them have died.The family of a Tyson employee who died from complications arising out of COVID-19 has sued the company for wrongful death.Tyson Price Action Tyson shares closed 0.14% lower at $62.66 on Thursday and were mostly unchanged in the after-hours.See more from Benzinga * Amazon Offers Full-Time Employment To 125,000 Workers Hired To Meet Increased Demand During Pandemic * UPS Slaps 'Peak' Surcharge On Amazon, Walmart, Others, As Delivery Requests Balloon Post Lockdown Ease * Trump Signs Executive Order To End Social Media Legal Immunity For Third-Party Content(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F […]
The number of jobs lost due to the coronavirus shutdown continue to mount, with the latest weekly total of Americans applying for unemployment benefits topping 2 million, yet again. Yahoo Finance’s Zack Guzman and Heidi Chung discuss. Stocks fell Friday morning, extending losses from the regular session Thursday as investors eyed renewed tensions between the U.S. and China.
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out […]
Tesla (TSLA) CEO Elon Musk has now received access to the first of 12 potential stock option awards from his extensive 2018 compensation plan- and thanks to the stock’s recent rally, these shares are now worth a whopping $775M.To receive his stock options, the company’s market cap had to stay at $100B or more on a 30-day and six-month moving average, alongside trailing four-quarter revenue of $20B or EBITDA of $1.5B.Musk can now purchase 1.7M Tesla shares at $350.02 each, or $591M total. Based on Thursday’s closing price, these shares now have a total value of about $775M. Of course, the actual profit Musk makes will depend on whether he exercises the option, and when he decides to sell his shares.Tesla shareholder Richard Tornetta recently sued Tesla’s board, claiming that it breached its fiduciary duty by awarding Musk excessive compensation. The judge ruled in 2019 that the board must now defend Musk’s compensation package, writing: “Plaintiff has well pled, however, that the board level review was not divorced from Musk’s influence.”Indeed, Tesla stock has almost doubled recently, gaining 93% on a year-to-date basis. And according to Wedbush analyst Daniel Ives, the electric vehicle maker is currently ‘turning a corner’ in terms of both demand and production. Although he reiterated his hold rating on the stock, Ives boosted his TSLA price target over 30% to $800- which is now in-line with the stock’s current share price.“While Tesla (and every other auto manufacturer) is navigating this unprecedented COVID-19 environment, the company took a major step forward around fulfilling demand and production concerns with the Fremont artery now up and running after the Musk vs. Alameda County stand-off got resolved,” Ives said.“While 2Q delivery numbers remain in flux due to a host of logistical issues as well as overall lockdown conditions now starting to ease across the US and Europe, it appears underlying demand for Model 3 in China is strong with a solid May and June likely in the cards and clear momentum heading into 2H” the analyst continued.Overall, Tesla scores a cautious Hold consensus from the Street, with analysts concerned the stock has rallied too far, too fast. Indeed the $620 average analyst price target indicates 23% downside potential from current levels. (See Tesla stock analysis on TipRanks).Related News: GM Delays Some Production Shifts At 3 U.S. Truck Plants – Report Tesla Asks China To Build Model 3 Cars With LFP Batteries – Report Fiat Chrysler Shares Decline on Dividend Payout Withdrawal More recent articles from Smarter Analyst: * Costco Pulls Back On Earnings; Top Analyst Sees Buying Opportunity * Cisco To Buy ThousandEyes For Reported $1B; Top Analyst Sees Strong Synergy Potential * Salesforce Sinks 3.5% After-Hours As Guidance Slashed * 5G’s Significant Memory Content a Key Growth Driver for Micron, Says 5-Star Analyst