How Large Was The U.S. Gold Market Trade Deficit In Q1 2015??

While the global financial system remained subdued in the first quarter of 2015, the U.S. Gold Market still suffered a large trade deficit.  Matter-a-fact, the U.S. Gold Market deficit in 2015 may surpass its full-year shortfall in 2014 by a wide margin.  Furthermore, with the heightened financial turmoil stemming from the Greek situation in Europe during the summer, I would imagine U.S. gold deficits may be even higher in the second and third quarter.

Before we look at the data for the first quarter of 2015, let’s take a peak at the U.S. gold supply and demand situation for the full-year 2014:

U.S. GOld Supply vs Demand Full Year 2014

Last year, the U.S. imported a total of 308 metric tons (mt) of gold, had domestic mine supply of 212 mt and scrap of 90 mt (my estimates based on GFMS 2014 World Gold Survey).  Thus, total U.S. gold supply was 610 mt.  Now, on the demand side of the equation, the U.S. exported 500 mt of gold and consumed a total of 179 mt in jewelry and coin-bar investment.  Hence, total U.S. gold demand in 2014 was 679 mt.

Apply simple math, the U.S. gold market suffered a 69 mt (2.2 million oz) deficit in 2014.  However, I believe the deficit was probably larger.  Why?  The World Gold Council Demand Trend Report may be understating physical gold investment demand.

For example, The World Gold Council stated that U.S. physical gold investment in 2014 (bar & coin) was only 46.7 mt (1.5 million oz) while gold jewelry demand was 132.4 mt (4.2 million oz).  I believe there was more than 46.7 mt of physical gold investment in 2014.  Unfortunately, many private minted gold bars are not accounted for in the World Gold Council estimate.

Regardless, the U.S. suffered a gold market trade deficit in 2014, and 2015 looks like it will be even larger.  According to the recent data put out by the USGS Gold Mineral Industry Surveys and the World Gold Council Q1 2015 Demand Trend Report, the U.S. suffered a 24.1 mt deficit during the first quarter of the year:

U.S. Gold Supply vs Demand Q1 2015

U.S. gold imports during Q1 2015 were 61.5 mt, mine supply was 47.7 mt and estimated scrap came in at 22 mt for a total of 131.3 mt of total supply.  On the other hand, U.S. gold exports reached 123 mt in the first three months of the year while consumption accounted for 32.3 mt.  Thus, total U.S. gold demand was 155.3 mt leaving a deficit of 24.1 mt for Q1 2015.

Where did the U.S. export all this gold?  Switzerland received the most (46.5 mt), followed by Hong Kong (28.2 mt), the U.K. (19.6 mt), India (14.1 mt), the U.A.E. (5.7 mt), Thailand (3.9 mt), Singapore (2.4 mt) and other countries (2.6 mt) for a total of 123 mt during Q1 2015:

U.S. Gold Exports Q1 2015 Breakdown

The top four (Switzerland, Hong Kong, U.K. & India) received 108.4 mt–88% of the total.  It will be interesting to see the data for June and July as the financial situation in Europe due to a possible Greek default sparked investors to purchase a record amount of Gold Eagles.  I would imagine U.S. gold exports will likely increase significantly during these two months as well.  This should make the U.S. Gold Market deficit larger in Q2 and possibly Q3.

I will provide updates when the information and data is released.

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30 Comments on "How Large Was The U.S. Gold Market Trade Deficit In Q1 2015??"

  1. Would the exports to the Swiss be dore for refining, considering how many refineries they have?

    The exports to HK are likely kilobars ex-comex (see http://goldchat.blogspot.com.au/2014/01/the-story-behind-jpms-10-tonne-gold.html for an example of JPM using comex as a temporary warehouse for kilobars). Would be interesting to see if there is any correlation between US exports to HK/Sing/India and kilobar movements from comex. It may also have something to do with the new CME HK contract, ie moving stock into HK warehouses to meet deliveries for that contract.

    • Bron,

      Excellent points. According to the USGS data, 29.2 mt of the total 46.5 mt exported to Swiss during Q1 were refined gold bullion. The remaining 17.3 mt were dore bars for refining.

      Furthermore, of the total 14.1 mt of gold exported to India, 8 mt were dore bars while 6.1 mt were refined bullion. Hong Kong, Singapore and Thailand all received refined gold bullion. It would be interesting to find out if some of that refined bullion is indeed CME HK bars moving East.

      Either way, the U.S. continues to suffer a gold trade deficit. Even if the Comex Bars held in the U.S. are being exported to Eastern countries, they would still have to be imported. Which means, it would show in the import data.

      The 24.1 metric tons gold trade deficit the U.S. suffered in Q1 2015 equals 775,000 oz of gold. Thus, the first quarter U.S. Gold deficit is higher than all Gold Eagles and Gold Buffaloes sold in 2014:

      2014 Gold Eagles = 524,500 oz
      2014 Gold Buffaloes = 177,500 oz
      2014 Gold Total = 702,000 oz
      Q1 2015 U.S. Gold Deficit = 775,000 oz

      Again, I would imagine the Q2 U.S. Gold Market Trade Deficit will likely be higher than Q1.

      steve

  2. I’m not clear from the above stats and graphics where gold repatriation from the US to Germany and other countries fit in – any thoughts?

    • Bill Essex,

      According to the USGS, monetary gold transfers (gold at the NY Fed) is not including in the trade data. Basically, the import-export figures are commercial gold trading, while movements of gold out or into the NY Fed are separate. However, I have found that some gold is taken out of the NY Fed and sold into the market as commercial.

      So, its really hard to tell what is what anymore.

      steve

  3. Steve,

    Would it be safe to assume that Swiss gold imports are en route to China? Possibly as well with others in the “top 4” too. As Asia accumulates metal we also have the continued nonsense ensuing at the Comex for open interest on PM’s. I came across the latest story on this and must have a lot to do with encouraging other nations to take our gold exports. As of today the sale continues as PM’s drop despite all the chaos in recent weeks.

    http://investmentresearchdynamics.com/comex-paper-precious-metals-open-interest-is-going-parabolic/

  4. Steve, of the 17.3 mt of dore bars exported to Switzerland during Q1, is there a way to ascertain if these dore bars were refined and then poured into kilo bars? Since kilo bars are the preferred refined gold bullion measure in China, versus good for delivery LBMA bars.

    Also would be interesting to know if the remaining 29.2 mt of the 46.5 mt total, were kilo bars or LBMA bars? In addition, what form of bullion went to India and the UK, since most UK gold export ends up going to Switzerland. The reasoning being, that if these measures are all in the kilo bar form, then it would be safe to surmise that this bullion’s ultimate destination is to the east, mainly China.

  5. Steve,

    Have you ever seen data that shows how gold is ever recovered as a byproduct of any other mining, like primary silver mines, or other metals?

    • Are you the David who said on June 21st, 2015 at 2:42 pm at this site that:
      “I’ll bet silver that the cost of silver on the COMEX NEVER drops a dollar from where it is now. I’ll also bet my geology degree on it, and I do know a few things about real-world supply.”

      that was when Silver was $16.20… but is now $14.66.

      Did you return your degree?

  6. It is really becoming quite obvious that overall economics are becoming paralyzed by what’s known as analysis paralysis. Steve , this is no fault of your own. It’s baked into the cake as part of a grand scheme to help initiate utter boredom regarding the masses.
    The real mission to all of this incredibly long hold out is in the success of accomplishing the take from every possible source.for how ever long it is tolerated.

    What appears to be amazing is that physical gold and silver holders , (especially P.silver holders) don’t collectively begin raising prices to a fairer level. What else would the banksters have to show for such an example of seceding but rebuttal in the form of verbal outrage. Assuredly that day is coming and not soon enough ! Until then happy zzzzzzzzzzzzzzzzzzzzzzzz’s…………

    • Hey Steve – thanks for the continued info…and in an attempt to create a red thread through the disparate corners of economy and finance, I thought I’d offer what is happening in the US Treasury market in 2015. Apparently, the buyers who bought 80%-90% of all the US Treasury debt have net sold $150 billion so far this year (through latest available data in May). Nothing of this sort has happened this millennia and only leaves one source…the US domestic public who is supposedly doing buying all the new issuance and scooping up reduced holdings of foreigners and Intra-Governmental holdings. All info in link via Fred & Treasury.

      http://econimica.blogspot.com/2015/07/2015-is-truly-unbelievable-in-us.html

      I’d encourage people to combine this tidbit that the largest, most liquid market is now a full frontal fraud with all the evidence Steve is compiling in the PM’s markets…things are truly progressing quickly. I know being a PM’s owner is no fun today and would never advocate somebody go “all in” on PM’s…but I believe not having them may ultimately be far more painful than the present hoax of a market PM holders presently endure.

      • Chinese PBOC increased by a paltry 600 tons their reserves so it looks that they do not intend to break the comex cartel any time soon (so not before several years).

  7. I believe it was the most worse investment i ever did.When you have lost 50-70% of your money you must ask yourself what is more painful?

    I don’t believe anymore the story of a crashing currency.All stupid storys from the PM-Lobby.
    We have burned a lot of money that is the truth, because we listened to morons like maloney,butler,Silberjunge(germany),….

    PM are not the investment that helps you in times of crises.Exactly the opposite is the case.
    Anybody can see this.

  8. Just dropping in to say: COT is clearly bullish right now.

    A while ago, when silver was at 17,5 and gold at 1200+, COT was very bearish. And it has been like that for years or decades. The COT just (almost) ALWAYS works as an indicator of future price movement.

  9. There’s no way gold gets any lower than this…

  10. The silver bug chart is always bullish.No news!
    But the reality is what counts.Not your dreams.

  11. Total crash now.HUI.The great silver bubble bursts.No end in sight.HUI again 4% down.
    This insvestment unbelievable.

  12. NYSE ARCA GOLD BUGS INDEX (^HUI) -NYSE
    128,56 – 7,00(5,17%) 22:03

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