Massachusetts Shipped Nearly $2 Billion of the Precious Metal to Far-Flung
Markets Last Year
By Megan Woolhouse
The Boston Globe
Tuesday, April 14, 2015
http://www.bostonglobe.com/business/2015/04/1...y-massachuse...
Massachusetts' top export is not sleek medical devices, cutting-edge
machinery, or life-saving pharmaceuticals. It is something more intriguing:
gold.
In a state devoid of gold mines, Massachusetts exported nearly $2 billion
in gold last year to places such as the United Kingdom, Switzerland, and Hong
Kong, according to WiserTrade.org, a Leverett trade research group. And these
were not paper transactions but 62,500 pounds of the glittery metal --
roughly the weight of a herd of more than two dozen rhinoceros.
But exactly who is exporting this gold has stumped even specialists
studying the Massachusetts economy, who can talk knowledgeably about almost
any product that leaves the state, from semiconductors to seafood to colon
cancer tests.
"I really would like to know, but I don't," said Northeastern
University economics professor Alan Clayton-Matthews.
As it turns out, much of the gold leaving the state appears to be just
passing through. In 2014, Massachusetts was not only the nation's
fifth-largest gold exporter but also its fourth-largest importer, accepting
about $1.5 billion from countries such as Canada, Colombia, and Mexico.
The middle man appears to be the gold-refining industry, which understandably
keeps a very low profile. Massachusetts has its own version of Fort Knox, the
Metalor refinery, located in North Attleborough. Metalor, a subsidiary of a
Swiss firm that makes gold bullion and parts for Rolex watches, is among the
nation's largest gold refiners.
The company did not return phone calls and e-mails. Juan Carlos Artigas,
director of investment research at the World Gold Council, a trade
association in London, also was tight-lipped about who here is buying and
selling all that gold.
"There are bar and coin dealers in Massachusetts that basically
function as a repository to sell gold to other parts of the country and parts
outside the US," Artigas said "But I don't think I can expose
names."
Artigas has good reason to be careful. Last month, armed robbers stole $5
million in gold and silver from a truck headed from Miami to Boston. The FBI
said the truck driver pulled over on a remote stretch of Interstate 95 in
North Carolina when men who said they were "policia" ordered them
out of the truck, then loaded barrels of gold and silver into a white getaway
van.
The security guards were employed by TransValue Inc., a Miami
transportation company that is offering $50,000 in addition to the FBI reward
of $25,000 to anyone with information. FBI Special Agent Michael D. Leverock
of the Miami bureau declined to discuss the truck's exact destination.
Larry Nyborn, the second-generation owner of Precious Metals Reclaiming
Service , a Westwood refiner, said much of the gold that arrives in
Massachusetts comes through Miami.
His small firm opened a location in West Palm Beach, Fla., in recent
years, extracting gold from old jewelry and electronics and selling it to
other US metal refiners, including Metalor.
Metalor makes gold bars stamped with its name and "999.9,"
representing the near-purity of the bars, and sells them internationally,
according to the company's website.
Metalor's suppliers include mining companies, central banks, dealers,
recyclers, and industries producing precious metal waste, according to the
company's most recent annual report.
"They're one of the big boys," Nyborn said. "They could
account for a big amount of [gold exports], but I don't have any way to know.
And I don't think they're going to tell you."
Neither will the US Census Bureau, which tracks specific goods and the
companies that export them. A spokesman said the names of those businesses
are confidential.
Metalor's 2013 annual report, the most recent available, offers few clues,
other than to say that the company's sole US plant "gained market
share" in recent years. Metalor board chairman Scott Morrison told
Bloomberg News in 2013: "Right now we can't keep up with demand in terms
of investors in Asia purchasing gold."
In 2013, Massachusetts shipped about $1 billion in gold to Hong Kong, up
from less the $1 million in 2011, according to WiserTrade.org. Last year, the
state exported about $217 million in gold to Hong Kong.
Commodities specialists said a modernizing global economy is creating
affluence in nations such as China and India, where demand for gold has
spiked. "Part of having more wealth is you're able to purchase more
jewelry," said KC Chang, a senior economist at IHS Global Insight, a
Lexington forecasting firm. "Gold benefits from a rising middle class in
Asia."
The price of gold doubled from 2006 to 2010 before peaking in 2011 at
about $1,900 an ounce, helping the precious metal become one of the state's
top dollar-value exports. Gold is now trading at about $1,200 an ounce.
Daniel Hodge, director of the Donahue Institute, a policy and economic
research arm of the University of Massachusetts, said state economists have
concluded that a single company, located near Attleboro, is responsible for
the gold passing through the state.
But that's as far as the research went, he said, because gold doesn't have
a big impact on the state's broader economy. Technology, pharmaceuticals, and
manufacturing employ more workers and offer a better barometer of
international trade and the state's economic health.
"There are other sectors we think are more telling about how well
Massachusetts companies are trading with Europe and Asia," Hodge said.
"But gold is one of the larger categories of commodities that we
export."
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