Something Big Changed In The U.S. Gold Market In 2017

Most Americans didn’t realize it, but something BIG changed in the U.S. gold market in the beginning of 2017.  While precious metals sentiment and buying in the U.S. has dropped off considerably in the first quarter of 2017, the East continues to acquire gold, HAND OVER FIST.

How much gold?  Well, let’s just say…. U.S. gold exports have nearly doubled during JAN-FEB 2017 versus the same period last year:

Total U.S. gold exports JAN-FEB 2017 surged to 101 metric tons (mt), compared to 56.5 mt last year.  This is quite interesting because total U.S. gold mine supply plus gold imports for JAN-FEB 2017 only equaled 80 mt.  Thus, the U.S. suffered a 21 mt gold supply deficit in the first two months of the year.  Which means, someone had to liquidate an additional 21 mt of gold from their vaults to export to the East….. where they still understand the vital role of gold as REAL MONEY.

And where did the majority of U.S. gold exports head to?  You got it….. Hong Kong-China & India:

Of the 101 mt of U.S. gold exports JAN-FEB 2017, Hong Kong-China and India received 61.8 mt, or nearly two-thirds of the total.  Switzerland received 28 mt, U.K. imported 5.6 mt and the U.A.E. acquired 3.3 mt.  The remaining 2.3 mt went to various countries such as, Germany, Canada and Mexico.

What is also quite interesting, is that the majority of the year-over-year increase went to Hong Kong-China and India.  U.S. gold exports to Hong Kong-China and India doubled from 31 mt during JAN-FEB 2016 to 61.8 mt JAN-FEB 2017.

What does this all mean?  It means, as U.S. precious metals investors continue to BICKER, COMPLAIN, BELLY-ACHE and WHINE about the low gold price, the Chinese and Indians smile as they continue to exchange increasing worthless fiat money for the shiny yellow metal.

Matter-a-fact, I have heard from several sources, that many precious metals investors in the U.S. are selling gold into the market.  This has to be one of the STUPIDEST things to do.  Of course, if a person needs to sell gold to purchase something or pay bills… that is understandable.  But, to sell gold because of low market sentiment, goes against all sound reasoning and logic to own gold.

People need to realize the U.S. and global financial and economic system are in the BIGGEST BUBBLE in history.  To sell one’s GOLD INSURANCE at this time, makes me wonder… what the hell happened to IQ’s recently?

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41 Comments on "Something Big Changed In The U.S. Gold Market In 2017"

  1. DisappearingCulture | May 10, 2017 at 9:40 am | Reply

    Thanks for bringing this to readers attention.

  2. Diederich Heßling | May 10, 2017 at 10:09 am | Reply

    Western people are very stupid. Eastern people are very clever!

  3. Steve,
    doesnt china pay a premium for physical gold? A mine wants to get the highest price?

    After 35 years of bad relative performance, gold and silver are universally ignored by most investors. few will even take a prudent 5% position. or if they do they buy the Spider GLD which is mostly a fraud.

    also, most americans are too poor to buy any gold. I would estimate that less than 20% of the population can even afford ONE oz of gold. The portion that can afford it don’t want it, YET. For example, I kept my physical gold but sold my ETF paper gold. There is no point in investing in a gold ETF. because of price capping, it will never go up during the good times. During the bad times, you will not be able to access it.

    finally, Americans have long held a linear view of history. Basically, what this means is that times always get better or at least stay stable. This is not stupidity, but the collossal lack of teaching American history to the children. Sometime, after 1965, they stopped teaching history in a meaningful way. Thus, a whole generation is largely ignorant of the desperate conditions that prevailed during 1776-1787, or from 1860 – 1870, or from 1932 through 1945. All these lessons have been lost on most. And America is about to repeat them (in a new way) again. If you ask people in 2040 if they own gold they will say “of course”.

    In my view this crisis is coming in less than 10 years, few will be prepared, and it will be very transformational. I see no way of avoiding it short of a machine takeover (AI) of humanity ( I don’t find this very likely).

    • “In my view this crisis is coming in less than 10 years”

      I am a bit of a believer in NUMBERS in the market; a real believer in PATTERNS.

      One of Gann’s major techniques for market timing was to use fractions of a circle, specifically into quarters, eighths and thirds, to count the number of days/weeks/months between highs and lows. For example, the circle has 360 degrees, 90 is one quarter; 45 is one eighth.

      Important numbers to count between highs/lows are therefore 30, 45, 60, 90, 135, (90 + 45), 150, 180, 210, 225, 270, 315, 330 and 360.

      3rd Qtr. 1932 the DOW Jones hit a low 40.60. Since that date this Index has increased exponentially by 100% every 10 years. It is now at the 51,200% mark (100%,200%,400%,800%,1600%,3200%,6400%,12800%,25,600% and 51,200%).

      It has taken 85 years to get to where we are today. One of Gann’s strongest numbers is 90; that puts us at the 3rd Qtr. 2022. Many of his theories are quite sound if you can understand them!

    • why not just buy a little at a time, Dollar Cost Averaging

      even owning small amounts of Gold would put people ahead of 99% of the population

  4. As always Steve, very interesting. Thanks. You have probably seen or maybe already mentioned the “Oil Extraction, Economic Growth, and Oil Price Dynamics” report that is free for download. If you have the time, maybe you can make a few comments about it. Page 11-13 are very interesting.
    http://link.springer.com/article/10.1007/s41247-016-0016-6

    “In 2015, capital expenses fell 16% and are expected to fall……..This will cause tension between the extraction industry and the financial sector as they grapple with ways to pay off debt and maintain extraction levels”

    “Eventually, extraction rates will fall fast enough to raise prices at least temporarily, as suggested by the empiri-cal model (3.6), until companies and citizens go bankrupt and demand decreases.”

  5. “conclusion, however, has to be that, because internal rates of growth are pushing up debt much more rapidly than GDP, there will in due course have to be a reset, most probably through the “soft default” process where the real value of accumulated debt is destroyed by a sharply higher inflation.”

    https://surplusenergyeconomics.wordpress.com/2017/05/10/95-exponentials-unravelled/

    So debt grows exponentially faster than GDP, in clear numbers. When we add declining surplus energy into the mix, its a good thing to own some physical gold and silver imho.

  6. I’ve been buying silver hand over fist. These prices are excellent. I usually rotate between gold, silver, miners, and gold money account. However, right now I like the price of silver. Good for the Chinese and the Indians. They have gone through severe currency debasements throughout their histories. I think they view gold as a savings vehicle and not just as hedge. If you know your currency is debased on an annual basis you need to convert savings into something that is viewed as a store of value. Dollar inflation has been masked by the petro-Dollar standard and by its reserve status. Its going to be a terrible day in American history when we are no longer the defacto world reserve currency. Imagine the U.S. without the reserve currency. I always think Venezuela with lots of guns.

  7. Is there a link to the numbers you’re using in the graphs?

  8. Great article…let me try to piece the puzzle together in my head. The U.S. produced 209 MT of gold in 2016. We’ve exported 38 MT in Dec and now an additional 101 MT in Jan/Feb for a total export of 139 MT over 3 months. The Dec-Feb monthly average gold export is 46 MT. At that pace we will have exported 100% of domestic mine supply by May 2017. Assuming the pace continues and doesn’t accelerate or decline, then the U.S. will export 343 MT in addition to the 209 MT it produced domestically for a total of 552 MT. I wonder where they will find the additional 343 MTs? I seem to recall an article stating that China’s domestic Gold production declined by 9%. They make up 15% of global mine supply. I think the global appetite for gold will accelerate once the world figures out there isn’t enough gold to satisfy demand. Its human nature. Since gold production is trending downward both domestically and globally, demand should continue to increase as the scarcity of gold and silver start to bite. I think we are starting to see the bug meeting the windshield in real time. No wonder TPTB are inflating alternative markets. They are scared to death people will notice the U.S.S America’s lifeboats quietly being placed into the water while everyone was lounging around enjoying a super stock market rally.

  9. the thing about gold is: there are looks of reserves in storage in New York and London. The FED can always lease more out. They can keep the price right where it is at indefinately. If mining costs increase the price will go up. They call that a bull market. Unless there is a major war in the middle east, the US is not going to lose its reserve currency anytime soon. what would replace it?

    • DisappearingCulture | May 10, 2017 at 3:37 pm | Reply

      What is real dispalces what is not real eventually. The ever-faster sale of real gold to the East means the fake gold ponzi comes to an end faster.

    • I don’t know what the future will hold…but the BRICS have an alternative to the SWIFT system, an alternative to the IMF, and alternative to the BIS. China was recently added to the SDR and global Gold accumulation appears to be increasing substantially. The alternative currencies like Bitcoin are going parabolic. Of course we had a balance of trade deficit of 502 Billion Dollars in 2016. The gov’t owes 20 Trillion and runs annual deficits of a Trillion plus or minus hundreds of billions. We have 200 Trillion in unfunded liabilities. We only get to see bits and pieces and maybe a hint or two of what’s behind the curtain. When Nixon took us off the gold standard in 1971 the average American didn’t have a clue. The dollar declined in value by 95% since that day. Your hubris is very typical of the average American. To think that China which has the largest financial center in the world doesn’t have a plan is wishful thinking.

      • Well said Petedivine… BUT as Steve always says; “It will not matter one IOTA if they haven’t got any OIL”!

        If you have a look at the stats they say the world has around 1.6 trillion known barrels of oil in reserves. On current usage that is about 50years worth.

        Steve will say; “That’s fine” BUT it will cost them to much to get it out of the ground to make it worthwhile; “Therefore it is useless”

        I think it is all very interesting!

    • Empty vaults. Almost-empty vaults with pallet-backed thin facade of gold-plated-tungsten that looks great from 50 feet. Vaults that are not allowed to be audited by external auditor “due to security concerns”. Auditors car-aircraft-tunnel-bridge explodes on the way to do the inspection. Audit cancelled and not rescheduled. “It’s fine, really.”

      There’s no gold except what you actually possess, and what the Chinese promise to deliver physically in Shanghai.

    • David Wainwright | May 10, 2017 at 11:22 pm | Reply

      Agreed, the most obviously “managed” market has been well and truly conquered. Until masses demand physical, not electronic references to PM’s, I too see the prices being held where wanted, for quite some time. Happy to hold my insurance bullion, just don’t think it’s heading north for a long time…. if at all.

  10. Diogenes Shrugged | May 10, 2017 at 5:05 pm | Reply

    Bix Weir has jumped the shark.
    https://www.youtube.com/watch?v=7iOCrxazqRE
    Just think of what a Monster Box will do for you.

    But who, exactly, will be buying an ounce of silver for $83,000?
    Hell, who will even be able to afford simple electronics?
    Bix appears to be counting his chickens before the eggs have even been laid.

    • What do you mean who will be buying your silver for $83,000???

      That’s when you start buying assets for pennies on the dollar in relation to what you spent for that ounce of silver in fraud fiat.

      That is the entire point of buying silver and gold. To buy things on the super cheap when paper collapses.

  11. Steve

    Nothing to do with this current topic BUT I thought the following article was interesting by David Yager; oilprice.com
    http://oilprice.com/Energy/Energy-General/A-Sobering-Look-At-The-Future-Of-Oil.html

    A few lines from the article….

    “Oil And Gas ‘Rust’: An Evil Worse Than Depletion”

    “The entire oil value chain is built of steel and steel begins to corrode the day it is cast. The oil industry never grasped this profound risk as it built a house for oil out of steel”.

    The thought was; steel would last forever but forever was defined by investors as profits and by governments and regulators as secure and immediate supplies of essential hydrocarbon energy.

    Simmons noted much of the core assets of North America and the world – pipelines, refineries, storage tanks, and wellbores – dated back to the big expansion years of the 1950s and 1960s.

    “Bottom Line: The Energy Patch Has To Be Rebuilt”. He called this a reconstruction project along the lines of the World War Two war machine or the Marshall Plan to rebuild Europe stating, “If the world wants to continue to use energy, its assets need to be rebuilt. A Simple law of nature”.

    • I should note these quotes where were made by late Mathew R. Simmons, author of “Twilight in the Desert”

  12. Stack your fiat gold is going to get cheaper….Under $1k is in the works…..

  13. Hi, just wondering what the significance of Jan-Feb is. Is that the 2 month period with the biggest difference between 2016-17? Is there good reason to exclude the rest of the data?

    • DisappearingCulture | May 11, 2017 at 4:48 am | Reply

      The rest of the data [March and April] is not in yet in all likelihood.

    • Man. We don´t even know the industrial silver demand for 2016 (from the corrupt offices that produce that info) and you want the april numbers one week after closing?

  14. Thanks Steve, Cheers-

  15. This gold could be the backing for the gold being used to slam the price in the markets?

  16. “…U.S. precious metals investors continue to BICKER, COMPLAIN, BELLY-ACHE and WHINE about the low gold price, the Chinese and Indians smile as they continue to exchange increasing worthless fiat money for shiny yellow metal”

    Great quote, Steve. This is the most important sentence in the article.
    If every American family would just buy one ounce of gold a year and one ounce of silver a month, I believe we could reverse the flow of wealth back into this country to a large extent. At least it would really make a difference.

    Keep Up the great work!

  17. Barbara Fitzgerald | May 11, 2017 at 6:21 am | Reply

    I am trying to find out the most reliable company to go with to buy gold and silver. So far the Lear company is who I am possibly going with and I am really new at this so I’m not sure how to go about it so if there is any suggestions of what to do would be greatly appreciated. I do not have a lot of money and relying on investing half my retirement. I have been talking to a co-worker who is big on Go!d and Silver and he suggested getting a couple of rounds ea h pay period but I’m not sure…. Thank you so much for any help that can be given……

    • JM Bullion

      I have spent thousands on their metals and have not been disappointed. You can find some great deals in their “On Sale” section. As of today, they have a 50oz silver bar on sale for only 45c over spot.

      • Justin Nathaniel Michael | May 11, 2017 at 9:04 am | Reply

        Hi Kevin and Barbara. I wasn’t able to discover a business with “Lear” in it’s name that sells silver bars. Could one of you please direct me to the name of the company you’re referring to? 45c over spot is an excellent price, cheers.

        Also @Steve, I’m learning a lot about economics from studying your site, and I’m kind of thinking that just like more people are waking up to the fact that this economy is unsustainable, especially since the publicity of the Trump campaign, that just like the price of gold went higher with the last interest rate hike, the markets next time around won’t wait around for everything to deflate if their is a big recession, but instead billionaires will start sinking their money into precious metals along with huge portions of the public, which will cause them to decouple from their oil price like you said soon after we start to see a fall in price, and that this might happen even before any hyper inflation scenario presents itself. There was one question I was hoping to answer though, as I haven’t found any confidence inducing information on it yet. Could you tell me how one would calculate what the all in cost of silver is?

        • Justin Nathaniel Michael,

          Kevin was referring to JM Bullion. Yes, they are a good reputable online dealer. The company Barbara was mentioning was Lear Financial. They can charge very high commissions.

          I would recommend that anyone looking to purchase gold and silver talk to several dealers and ask their commission above spot price. Also, I would recommend contacting TOM CLOUD, who I sponsor on my site as he is one of the most UPFRONT, HONEST and offers some the BEST RATES in the industry.

          You can find his contact info here: https://srsroccoreport.com/precious-metals-investing/

          When anyone calls up Tom Cloud, he will answer all questions and does not believe in HARD SELLING. However, Tom has been to court several times as an expert witness helping clients who were taken advantage by other dealers.

          Justin… about your question on SILVER COST. I do the same for the gold mining industry as well as the silver mining industry. I do not go by CASH COSTS or ALL IN SUSTAINING COSTS. These metrics are based upon deducting by-product metal sales and do not include a lot of other costs. So, I use my NET INCOME & ADJUSTED INCOME Approach to arrive at a more accurate TOTAL PRODUCTION COST.

          I will be writing an article on the Silver Mining Industry’s production cost shortly.

          steve

    • DisappearingCulture | May 11, 2017 at 9:44 am | Reply

      Barbara,

      Companies I have had a good experince with:
      http://cloudhardassets.com/
      https://www.providentmetals.com/
      https://sdbullion.com/
      And a local dealer [who will pay me cash 7 days a week if I want to sell]

    • JM Bullion very good people to tnvest with. Do NOT invest with 007 bullion in Miami. Crooks!

    • I use texas precious metals best price free shipping.

  18. And who in their right minds would ever need 101 mt of barbarous relict… LOL. Nice catch Steve !!!

    PS. The majority of Swiss gold imports are refined to a 9999 standard and then are exported again, heading eastward….

  19. Ahmed Abdelbary | May 11, 2017 at 11:58 am | Reply

    What about apmex?

    • I have bought from them a lot and are great. Tom Clouds and moderncoinmart.com are also great to buy PMs

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