2012-2015 U.S. GOLD SUPPLY DEFICIT: One Hell Of A Lot Of Gold

The U.S. suffered another sizable gold supply deficit in 2015.  Matter a fact, the deficit was 50% larger than in 2014.  In 2015, total U.S.gold demand was 118 metric tons (mt) higher than total supply versus 77 mt in 2014.

According to figures put out by the USGS, World Gold Council and Thomson Reuters GFMS, the U.S. had a total of 553 mt of gold supply compared to 671 mt of total demand… leaving a 118 mt shortfall for 2015:

US-Gold-Supply-vs-Demand-Deficit-2015

Here is how I arrived at the figures shown in the chart above:

U.S. Gold Supply & Demand Figures 2015

Domestic Mine Supply = 213 mt

Gold Imports = 265 mt

Estimated Scrap = 75 mt

Total Supply = 553 mt

Gold Exports = 478 mt

Domestic Consumption = 193 mt

Total Demand = 671 mt

Total Deficit = 118 mt

American gold consumption increased from 179 mt in 2014 to 193 mt in 2015.  The majority of the increase was due to higher Gold Bar & Coin investment.  According to the World Gold Council Full Year 2015 Report, Americans purchased 132 mt of Gold Jewelry and 47 mt of Bar & Coin in 2014 versus 120 mt of Gold Jewelry and 73 mt of Bar & Coin investment in 2015.

What was interesting was the huge spike of U.S. Gold Bar & Coin demand during the third quarter of 2015.  This was at the same time when the retail silver market suffered extensive shortages with upwards of two month wait times on certain products.  Americans purchased 33 mt of Gold Bar & Coin in Q3 2015, 45% of the total for the year.

While some precious metal investors do not trust any of the data that comes from the World Gold Council or Thomson Reuters GFMS, I believe the figures for the U.S. are pretty accurate.  If we look at Gold Eagle sales from July-Sept 2015, they totaled 397,000 oz while Gold Buffalo sales were 74,000 oz.  Thus, total sales of these two official gold coins equaled 471,000 oz or 14.6 metric tons.  The remaining 18.4 mt of Gold & Bar & Coin for Q3 2015 was in from other official coins and bars (such as Gold Maples) and private bars and rounds.

U.S. Exports Every Bit Of Its Gold Supply In 2015

Now, if we were to exclude U.S. gold scrap supply and domestic consumption, this would be the result:

US-Gold-Mine-Supply-Imports-vs-Exports-2015

U.S. domestic gold mine supply of 213 mt and imports of 265 mt (478 mt) is the same total of gold exports at 478 mt.  Basically, the United States exported every bit of its mine supply and imports abroad.

U.S. Four-Year Gold Supply Deficit Equals One Hell Of A Lot Of Gold

If we add up total gold supply and subtract total demand since 2012, the United States suffered one hell of a deficit:

US-Gold-Supply-Deificits-2012-2015

As we can see from the chart above, the U.S. experienced annual gold supply deficits since 2012.  In 2011, the U.S. actually enjoyed a 215 mt surplus.  What was interesting is that during the years when the price of gold surged (2009-2011), the U.S. reported more annual surplus.  However, since the price of gold peaked (2011), it has been one annual deficit after another.  I believe this is due to a significant “Trend Change” by the Eastern countries to acquire as much gold as they can get.

If we add up the annual gold supply deficits from 2012 to 2015, it totals 568 mt, or a massive 18.3 million oz (Moz).  To give you an idea of how much gold that is, it equals all the Gold Eagles sold by the U.S. Mint from 1988-2015, 18.3 Moz:

US-Mint-Gold-Eagle-Sales-1988-2015-NEW

So, in just the past four years, the total U.S. gold supply deficit equals all the U.S. Gold Eagle sales for the past 28 years.  That’s a one hell of a lot of gold.  It amounts to a $22 billion gold supply deficit, based on a $1,200 current market price multiplied by 18.3 Moz.

I will be writing more articles on the U.S. and Global gold supply-demand forces.  However, the basic takeaway is this… physical gold continues to be drained from the WEST and shipped to the EAST.  As we can see from the data in this article, the U.S. continues to export all of its domestic mine supply and imports abroad, while using its scrap supply for consumption purposes.

Which means, the present American Gold Ownership Strategy is to EXPORT IT ALL, JUST LET US KEEP THE SCRAPS.

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11 Comments on "2012-2015 U.S. GOLD SUPPLY DEFICIT: One Hell Of A Lot Of Gold"

  1. Well yes, why to keep the barberous relic? Seriously, i think they had no other choice other than to supply the eastern demand in order to avoid a significant rise in the Gold price and a significant drop in the Dollar for years now. But where is the point of exporting all the Gold and at the same time import it again? Make’s little sense to me.

  2. Even though you post once a week, I can’t help but check daily for any post….
    Yes your honest and accurate posts are important to me.
    There is so much hyperbole, distortion and exaggeration that coming here is so refreshing, here we get the facts with excellent graphs. Chris Martensen of Crash Course and Peak Prosperity and You sir realize the Importance of EROI but sadly everyone else doesn’t seem to get it.
    Thank you for the excellent work you do.

  3. Steve,

    I have found that there have been quite significant differences between the figures provided in the USGS summary sheets and those tabled in the Yearbooks.

    For example: the import tonnage tabled in the 2010 summary is 616 tonnes. Yet this clearly includes BULK tonnage figures and is not purely gold content. If one references the 2010 Yearbook, the table for ‘ores & concentrates’, ‘Dore & precipitates’, and ‘refined bullion’, quotes a total quantity of 604 tonnes and value of US$11,600m. Yet the 257 tonnes of ‘Ore & Concentrates’ is itself only valued at US$58m. Dividing that by the average prevailing gold price over 2010 yields an estimated gold content of c. 1.5 tonnes – a big difference to the 257 tonnes that has ended up in the summary table for that year.

    A similar large difference occurred in the tables for 2011, this time it exaggerated the level of gold imports by 238 tonnes if one was only consulting the summary table.

    In a similar fashion the 2010 summary also under-stated the gold export by 54 tonnes (2009 it was 55 tonnes & earlier years even worse).

    The summary tables also exclude consumption of gold coins from the mint. So the summation of all these errors do have quite an impact on the overall gold flows into/out of the US. By my estimates, the additional outflows for just a subset of past years is as follows;
    2007 ~ 71t
    2008 ~ 146t
    2009 ~ 143t
    2010 ~ 382t
    2011 ~ 264t
    2012 ~ -4t
    2013 ~ 22t
    2014 ~ 98t.

    I have to also question your inclusion of refined scrap into the yearly flow balance. It is impossible to know just what proportion of scrap is from US internal sources or from imported scrap. All imported scrap has already been captured under Imports (so including it would be double counting). All scrap from US sources has, by definition, already been captured under gold flows in prior years. Logically it is recycled consumption from the past but has remained part of US gold stocks.

    Thank you for all your excellent articles. I always look forward to them.
    CPDLC

    • CPDLC,

      Excellent comment and additional info. Yes, it’s true that ores & concentrate values are much less than of course bullion and dore bars. And yes it is true that there should be a conversion for ore & concentrate imports as overall tonnage is much less when we calculate the actual value.

      That being said, since 2012 most of the gold imported into the United States has been “Dore Bars & Bullion”. Here was the amount of gold ores & concentrates for 2012-2015:

      U.S. Imports of Ores & Concentrates:

      2012 = 5 tonnes
      2013 = 0.4 tonnes
      2014 = 0.5 tonnes
      2015 = 0.5 tonnes

      Furthermore, when I calculated U.S. gold consumption, I was going by the World Gold Council & GFMS figures, not USGS. Actually, USGS figures for scrap and consumption are way off. The consumption is probably lower due to (as you stated) that the USGS does not include gold coin in their demand figures.

      However, you are correct that my figures for 2011 need to be updated lower due to a larger amount of ores & concentrates.

      steve

  4. Even with the corrections stated by esteemed commenters…None of this comes close to the expanded reserves of China …..Estimated to be at 10,000 to 15,000 Metric Tons. Admittedly could be even more because of imported Gold being moved in by Military convoy ( As much as 20,000 Metric Tons)..You can bet the U.S. is watching where they are storing this Gold in their secreted locations….This had it’s intended effect on the “IMF and the World Bank:” When they granted them the coveted and now shared title and position of “World Currency Reserve” with the United States. Thus denying the the United States in effect from printing more worthless paper to pay the interest on 20 trillions of debt which has now exceeded for the first time in United States history it’s “Gross National Product or GNP.” The “FED” has not and will not release the total amount of Gold reserves of the United States or the inventory held in Fort Knox. I suspect the reason (I HOPE) is tactical rather than exposing the amounts held …..Why would you divulge the amount and location, when one dirty nuclear bomb could render the supply useless for thousands of years? Better to have your Citizens buy and disperse further quantities of gold in secreted locations for future confiscation and centralization to rebuild the nations stock pile of gold….You can bet that that insidious tactical move has not been discarded as a stratagem….. The Government is making moves through the banks to do just that via Negative interest rates…And more to come in out right confiscations of citizens savings and wealth to pay the enormous debts and 65 trillions in unfunded liabilities…….The traitor president is trying to raise the taxes on Oil/Gas by $10.00 for the average Citizen as i write this. The suppression of Oil prices per barrel is the direct result of OPEC, Saudi’s, and Russia…Who intend that the U.S. cannot pay it’s debts with Petrol dollars…and a world wide scheme to bring the down fall of the West by financial destruction and subjugation of the world by the BUTCHER CULT MUSLIMS. Yes politics and political/Military tactics come into play and cannot be ignored. By flooding the WEST with “REFUGEES,” They insert terrorist as well put a mammoth drain on finite resources of those countries they invade…..This Insane Traitor President has thwarted any attempts at increasing wealth…Instead has done everything in his dwindling power to destroy America by any and all means…From it’s social structure to it’s financial institutions and energy sources…We are in uncertain times…..Fragile beyond reason…What will follow will be a “RESET” that the world has never seen before…..and may never see again…If we and the world survives it…..

    • A dirty bomb would make a gold repository hazardous to be in, but it wouldn’t contaminate the gold itself. After a few weeks/months, the gold could be recovered and re-inventoried. This is not more than an annoyance to a strong country like PRC (assuming that they didn’t want to “sacrifice” some of their people to go get the gold immediately). A high-yield nuke could “distribute” a gold stockpile as fallout, making it difficult to use as money, but a near-miss (or mis-target) would be the same as a dirty bomb, again, no-problem except for now the country with the gold holding facility is at hot-war with x for nuking the territory.

      Ineffectiveness is the same reason chem’s, bio’s and fallout-nukes are not used as much as “conventional” forces. NBC weapons work great on unprepared civilians and civilian infrastructure (the prize), but hardly at all on 1st world military. Treaty obligations: yeah, right.

  5. Sir…One of my fields of training was in Nuclear, Biological and Chemical warfare……I suggest you tour the melted down reactor in the Ukraine or in Japan….Talk to some “REAL” experts on Nuclear contamination…….If hit with a real Nuclear dirty bomb…The stock piles (S) would be useless for thousands of years….I do not know from whom you garnered your information from…But, I would talk to the folks in New Mexico…As for the rest….An all out Nuclear war would leave very few concerned parties intact anyway…..If any. I do not know what you mean by “TREATY OBLIGATIONS.” I do know we have them with Japan, Formosa, Taiwan and the Philippines…I also know that China has raised Coral shelf’s into Islands and put airports and missals on them to project their power into the Yellow Sea, The Gulf of Tonkin, Philippine Sea, and even the Pacific Ocean …And are threatening to shoot down aircraft of International commerce that approaches within 12 miles of these islands or capture ships on International sea ways…..They are becoming increasingly belligerent….Ignoring international law with these superficial man made islands that are neither recognized by the United Nations or the immediate countries that are threatened. …..They still appear on maps as a Coral shelf (S)….I think you under estimate the danger posed….Those comments were made in the initial post to point out tactical ramifications of the current situation as it applies to a real circumstance as it appears today…I doubt that a country with over a billion people is worried about sacrificing anyone….Crushing a opposition with overwhelming force is a case history of China’s military tactics…..Moving all the pieces into place before striking is just good military planning…China is no different..Ask General Swartscoff (Spelling is not correct) if he were still alive and he would tell you so. Anyway….It has been a pleasure…I hope that if events move toward military action on a world scale I am not here to see it……I would not enjoy seeing first hand the annihilation of mankind……

  6. I wonder if this is how the US is repaying some of the countries who want to repatriate their gold? Is there a way to see where the gold goes? Thanks for your great research Steve.

  7. Your assumption of 75mt scrap supply is too low and what have you used for previous years please?
    If they are similar then I think your conclusion of a “deficit” is incorrect.

    From the USGS, these are the last few years of scrap supply. You will note how supply increased with the rising gold price as one would expect, peaked in 2011 when the gold price peaked, and has been falling since:

    2014 – 200mt
    2013 – 210mt
    2012 – 215mt
    2011 – 263mt
    2010 – 198mt
    2009 – 189mt
    2008 – 181mt
    2007 – 135mt
    2006 – 89mt
    2005 – 81mt
    2004 – 92mt
    2003 – 89mt
    2002 – 78mt

    While the comment above is valid about America refining both local and imported scrap, America imports relatively little scrap according to the USGS. These are my calculations from the available data:

    2013 – 27mt
    2012 – 29mt
    2011 – 17mt
    2010 – 18mt
    2009 – 19mt
    2008 – 17mt
    2007 – 22mt
    2006 – 23mt
    2005 – 15mt
    2004 – 12mt
    2003 – 11mt
    2002 – 7mt

  8. “In 2011, the U.S. actually enjoyed a 215 mt surplus”

    Steve, are you including scrap in your import/export analysis?

    Not only did America refine a lot of scrap itself in 2011 (263mt of which 17mt was imported) but it also exported a lot (148mt), mainly to Switzerland/Canada and presumably because internal supply was so great.

    I have 2011 as a deficit year according to USGS data.

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