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What does the statement "US institutions are buying gold offshore" mean?
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The statement “US institutions are buying gold offshore” means that large American financial entities — such as hedge funds, pension funds, sovereign-style wealth funds (e.g., university endowments, state pension plans), banks, or asset managers — are purchasing physical gold and deliberately choosing to store or take delivery of that gold outside the United States, rather than inside the U.S. (e.g., in vaults in New York, Delaware, or other domestic COMEX-approved depositories).
Why “offshore” matters- Primary locations: The most common “offshore” vaults for these buyers are in London (especially the London bullion market vaults run by banks like HSBC, JPMorgan, or the Bank of England), Switzerland (Zurich or private vaults like Via Mat or Loomis), and to a lesser extent Singapore or Hong Kong.
- They are explicitly avoiding U.S. soil for custody, even though the buyers themselves are American.
What it typically signals (the implied meaning), When analysts, gold-market commentators, or posts on X say this, they usually mean one or more of the following:- Distrust in the U.S. financial/legal system
- Fear of future capital controls, gold confiscation (like 1933), or civil-asset forfeiture.
- Concern that in a major crisis the U.S. government could freeze or seize assets held domestically (e.g., Executive Order powers).
- De-dollarization / hedging against U.S. dollar collapse
- Institutions want gold that is outside the direct reach of the U.S. Federal Reserve, Treasury, or OFAC sanctions regime.
- If the dollar loses reserve status or hyperinflates, gold held in London or Zurich is seen as more “neutral” and easier to transact with non-U.S. counterparties.
- Operational and legal advantages
- London and Swiss vaults operate under different legal jurisdictions with a long history of respecting private property in precious metals.
- Allocated gold in London is often treated as the client’s direct property (not a bank bail-in risk), and Swiss law is extremely protective of vault clients.
- Avoiding COMEX/LBMA price manipulation allegations
- Some institutions believe the U.S.- and London-based paper gold markets (futures, ETFs) suppress prices, so they take physical delivery outside the main Western pricing hubs to “squeeze” the system or simply to own real metal that can’t be rehypothecated.
Real-world examples (2023-2025)- Large U.S. university endowments and state pension funds have been reported (via regulatory filings and vault data) moving hundreds of tonnes into Zurich and London vaults.
- Certain U.S.-based hedge funds (especially those with a “hard money” or macro tail-risk bent) have taken delivery in Singapore or Switzerland rather than New York.
- Gold flows into the London vaults (cleared by the LBMA) and Swiss refinery data show a marked increase in metal originating from U.S. institutions since roughly 2022.
In short“US institutions are buying gold offshore” = American money is buying physical gold, but they insist on keeping it outside U.S. jurisdiction, which is widely interpreted as a vote of no confidence in the long-term stability of the U.S. financial system or dollar hegemony. |
