Trump Market Euphoria Impacts Precious Metals Demand: Plummets In West, Surges In East

With the Trump euphoria pushing the broader markets to new all-time highs, it has impacted precious metals demand considerably… especially in February.  Precious metals investors believing the White House “Grandiose plans”, of making American great again, have cut back seriously on their precious metals buying.

There seems to be a percentage of the alternative community that are convinced that Trump will actually put the U.S. back to the way it was in the 1960’s.  And that is, back to a manufacturing powerhouse with high-paying jobs.  While this would be a wonderful thing to do, the continued disintegration of the global oil industry, just won’t allow it to happen.

IT WAS A ONE-TIME DEAL, and that period has come and gone…. FOREVER

Regardless, Western demand for precious metals declined considerably in February versus the same month last year.  A few years ago I spent more time publishing articles on gold and silver demand, but have refocused my analysis on how energy will impact the precious metals, mining and the overall economy.

However, Louis at Smaulgld.com does an excellent job publishing articles on precious metals demand.  So, I have used some of his data and one of his charts.

As I stated above, the Trump market euphoria has taken the wind out of precious metals investor recently.  According to the data from Smaulgld.com and the U.S. Mint, sales of gold and silver have plummeted in the West (especially USA), but surged in the East:

As we can see, Shanghai Gold Exchange withdrawals surged 67% in February versus the same month last year, while Perth Mint silver sales declined 17%, Perth Mint Gold sales dropped 32%, U.S. Gold Eagles fell 67% and Silver Eagle sales plummeted 75%.

According to Louis’s article, Shanghai Gold Exchange February Withdrawals Highest On Record, he published the following chart:

Chinese Shanghai Gold Exchange withdrawals were 179 metric tons (mt) in February compared 107 the same month last year.  Gold withdrawals from the Shanghai Gold Exchange are a pretty good proxy for the physical metal demand taking place in China.  We must remember, global monthly gold mine supply is approximately 265 mt.  Which means, the Shanghai Gold Exchange withdrawals of 179 mt accounted for two-thirds of global gold monthly mine supply.  That’s a heck of a lot of demand… from just one country.

The decline in U.S. Gold Eagle and Perth Mint gold coin sales in February versus last year equaled 67,806 oz.  However, Shanghai Gold Exchange withdrawals increased 2,315,000 oz in February compared to the same month last year.  So, we can clearly see that the increase in just Chinese demand, via the Shanghai Gold Exchange withdrawals, more than made up for the decline in Western retail official cold coin purchases.

Unfortunately, the Royal Canadian Mint does not publish their Gold or Silver Maple Leaf sales until after the end of each quarter.  That being said, Canadian Gold and Silver Maple Leaf sales normally parallel what is taking place in U.S. Eagle sales.  Thus, Gold & Silver Maple Leaf sales are probably down signifcantly as well.

I would imagine most precious metals investors came across this article published on Zerohedge a few days ago, Demand For Physical Gold Is Collapsing.  It seems as if the intent of this article was to generate a lot of READS.  Because, if we look at what is taking place in China, there is no collapse in physical gold buying.  Matter-a-fact, there was a record amount of gold withdrawn off the Shanghai Gold Exchange last month.

The author of that article, needed to include a footnote stating the following:

Western physical precious metal demand (especially in the USA) decreased significantly due to the Trump Market Euphoria, while Shanghai Gold Exchange withdrawals hit a new record in February as the Chinese realize the U.S. economy and Dollar is still toast.

I am completely dumbfounded by recent decline in precious metals demand and sentiment in the West.  While I can understand the reason precious metals investors believe Trump will make America great again, the awful ENERGY DYNAMICS in the future will not allow us to return to the good ‘ole days of a manufacturing super-power.  Rather, the upcoming collapse will change our lives forever.

When the Dow Jones Index and broader markets finally crack, there won’t be many SAFE HAVENS to invest in.  Along with a collapse of the Dow Jones Index, Real Estate prices in all sectors will also head down the toilet.  Investors scrambling for something to protect wealth will finally move into precious metals.  Unfortunately, there won’t be the available supply… only at MUCH HIGHER PRICES.

So, this current downturn in Western physical gold and silver purchases do not faze me one bit.  It only indicates that most Americans are completely insane when it comes to sound fundamental investing.

IMPORTANT NOTE:  I will be publishing an article on the continued disintegration of the Global Oil Industry.  I provide data showing how Mexico’s national oil company, PEMEX, is literally BANKRUPT.  By looking at the data, logic suggests that the global oil industry is in serious trouble.

Lastly, the data for the Perth Mint sales came from two articles at Smaulgld.com, Perth Mine Silver Sales Slump In February and Perth Mint Gold Sales February Drop 32%.  Sales of Gold & Silver Eagles were found on the U.S. Mint website.

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29 Comments on "Trump Market Euphoria Impacts Precious Metals Demand: Plummets In West, Surges In East"

  1. Sentiment and trust is what steers the ‘market’, energy drives the economy. The UK adds more than £6,- in debt for every £1,- in GDP. Poor retail ‘investors’ will lose everything when this blows up as the energy cliff approaches. Its rather scary when you take a good hard look at our (near) future regarding energy.

  2. “That’s a heck of a lot of demand… from just one country.”

    you mean “in” one country. the demand will be mostly chinese trying to get their wealth out of china and into a western christendom human-rights nation – meaning among other things that they think “maga” is going to make some progress.

    “And that is, back to a manufacturing powerhouse with high-paying jobs. While this would be a wonderful thing to do, the disintegrating ENERGY situation in the future just won’t allow it to happen.”

    yeah, except you mean the citizen-disintegrating situation – the average white taxpaying citizen is age 58. dollars, gold, oil, all are irrelevant next to that.

  3. Really like your site with emphasis on energy twist. A very intriguing perspective. When I am driving and the fuel gauge is on low, I want to drive faster so I get there before I run out of gas, when in fact, driving faster increases fuel consumption and makes it more likely that I will run out of gas.

    I also like the fact that you recognize Louis’s work over at Smaulgld. Your approaches seem to complement each other.

    • Hubbs,

      Thanks a million for your comments. And yes, I totally agree. Very few people truly understand just how dire the energy situation will become in short order. Now, I am not saying this year or next, but as time goes by… the world’s economy will fall off a cliff.

      I also agree with you that Louis does excellent work covering gold and silver supply-demand. I plan on adding his website to my IMPORTANT HEADLINES link shortly.

      thanks again,

      steve

    • March 1932 gold was around $20.00oz
      March 2017 gold is around $1200.00oz
      If I am correct that is an increase of 5900% in 85 years.
      70% per year on average
      This doesn’t suggest to me gold is going backwards.

      • You have that completely backwards. a) Gold did not go up “70% per year on average”, and b) gold is money and as such a hard currency against all other currencies have fallen, as they all have been extensively bloated by massive amounts of debt that cannot be paid back. Sooner or later they will hyperinflate or implode and some sort of debt jubilee (default) along with newly issued currencies will be on the plate: think 1 new $ for 1000 old dollars… and nothing will have changed for anyone, right? Maybe not even the price of gold… 😉 Time will tell, but we’re all in for some wild times ahead of us.

        • I haven’t got it backwards CHX13 (March 1932 gold was $20.78oz)it might have gone sideways for 40 years until March 1972 where it was priced at around $48.00oz and then slowly oscillated to the price it is today. The increase is 5900% in 85 years.

          I will give you another number. In the seventies (1970) you could buy a house in Sydney Australia for around $20,0000.00. Today that house on average has increased by around 4000% plus ($800,000.00) in 47 years (1970-2017). What’s that 85% per year on average?

          And then there is EXXONMOBILE! you could buy these shares for $0.20c in 1970, in June 2014 they closed at $93.00. That is an increase of 46,400% in 44 years, better than 1000% per year (1970-2014=44 years). If you bought 100,000 shares at $0.20c; $20,000.00 they would have been worth 9.3 million in June 2014.

    • David,

      Thanks for that link. I had not realized that Indian Gold Demand surged higher as well. Looks like things are about to get a whole lot more interesting this year.

      steve

      • DisappearingCulture | March 21, 2017 at 8:20 am | Reply

        You mean this http://en.israelidiamond.co.il/News.aspx?boneId=918&objid=18014 [link in Kranzler’s article link above?]?

        Readers here and Kranzler have named the reasons U.S. Canadian and Western Euopean demand are down. But overall global demand is up. I suspect bribery or some paid or by threat agenda when “Simon Black” or someone eelse implies global demand is down just becase a minority of the world’s population [Western world] demand is down.

  4. William Philipson | March 20, 2017 at 6:25 pm | Reply

    Re: gold and silver purchases do not phase me one bit. The correct verb is “faze”. Bill

  5. Thanks Steve, regards.

  6. From gman above
    “yeah, except you mean the citizen-disintegrating situation – the average white taxpaying citizen is age 58. dollars, gold, oil, all are irrelevant next to that.”

    That avg age thing is BIG! Bigger than anyone talks about.
    All those baby boomers retiring and going on social security, and the big thing is they start living off their retirement accts which can be drawn on at 59 with no penalty.
    All of a sudden they will be more concerned with the return of principal than the return on principal.
    Trade paper for had asset.

    • “Trade paper for had asset.”

      heh. “had asset” is right – at this point most “assets” are just ponzi assumptions.

      “Bigger than anyone talks about.”

      I’ve been talking about it since the 1980’s. “you’ll never collect social security, the white women aren’t having any babies.” never got a response except for “sexist!” or the silent treatment. well now here we are at the start of the roller coaster ride, about to go over the top, and you look ahead and see there’s no track ….

      “All of a sudden they will be more concerned with the return of principal”

      the principal is long gone.

  7. According to a recent zero hedge article http://www.zerohedge.com/news/2017-03-06/half-americans-cant-write-500-check
    half of the US population can not write a $500 check in case of an emergency. That is perhaps the simplest explanation why sales of precious metals in the west are declining. People can not afford it to buy metals.

    Many online precious metals dealers react to the collapsing demand by pushing sales of silver which is the more affordable metal. This unexpected development means that deflation is more likely in the west than hyperinflation. There are many voices on the web claiming that the Dollar will collapse. The reality seems to be different. The Dollar has been collapsing since 1980 according to experts, but holding Dollar cash positions was not a bad idea during the past 10 years.

    • “This unexpected development means that deflation is more likely in the west than hyperinflation.”

      you don’t get it. what we will see – are seeing – is neither inflation nor deflation, but wealth transfer. the amount of money WE have will deflate, while the amount of money THEY have will inflate. WE will owe, THEY will own. WE will work six hours for a bowl of soup, THEY will obtain currency to buy whatever they want.

  8. Hasn’t US gun sales fallen off since the election?
    Perhaps the fear and prep trade has subsided for the moment.

    • DisappearingCulture | March 21, 2017 at 7:54 am | Reply

      With Trump et al in office, the public is less concerned about an imminenet firearm or ammo ban, hence less urgent buying. This included dealers whose inventory would be grandfahtred in.

    • “Hasn’t US gun sales fallen off since the election?”

      yes. a slight uptick in leftist gun purchases.

      “Perhaps the fear and prep trade has subsided for the moment.”

      no, rather everyone’s garages are full now. trump’s election has postponed the inevitable so lots of people are taking advantage of the remaining opportunity for normal actions, but the underlying problems are all still there and everyone knows it.

    • Counterfiat:
      I think is a combination of things: less disposable income to buy guns ( and PMs), Trump negating gun hoarding concerns, and I think a saturation of guns already owned by the bulk of those people who prep or who may decide to prep. If a SHTF scenario becomes reality, it indeed would be interesting to see the future value of guns. Paradoxically, if there is a mass “die off” then there will be less need/demand for guns.

      Some people theorize that the wealth transfer will benefit those people who have saved, especially PMs, and who then plan to buy things on the cheap after the carnage has settled. My concern is that private ownership,especially of land and real estate,will be so heavily taxed that people will have to surrender ownership to the government, which basically makes it a race to the bottom: If high taxes make owning property prohibitive, then people will be in a rush to sell, driving the price down even more quickly as the fascist government/ banks wind up owning everything, with the investors having their wealth extracted first by taxes, and then seeing their real estate values tank. Even cars will be a dime a dozen, not because of tax liability but also availability of gas. I think much depends on the kind of government that emerges. If I am not mistaken, usually it winds up being a non republic or non democracy.

      • “it indeed would be interesting to see the future value of guns. Paradoxically, if there is a mass ‘die off’ then there will be less need/demand for guns.”

        1) everyone will need one. 2) there will be plenty laying on the ground. 3) everyone will have one.

        (heh. love how you have “die off” in quotes.)

        “as the fascist government/ banks wind up owning everything”

        almost. you mean the “banks” (the “global elite” “international financiers” “deep state”, any or all) wind up owning the government which winds up owning us. other than that, yeah, bingo. always was the plan, all along.

  9. In my experience, most speculators are followers who lack conviction and go wherever they are led by propagandists and shills: they want someone else to tell them what to do and do their thinking for them. In the case of Trump’s election, we are witnessing another bit of temporary mass manipulation, the euphoria of which is already fading, like the first few months of a marriage. There has been no positive change whatsoever to underlying fundamentals, but mainstream media is careful not to address that, because it’s negative, and most people don’t wanna hear it. Expect precious metal sales to swing back upward very respectably when data is released for the month of March.

    I would beware of the temptation to relax this summer. The old “Sell in May” axiom stopped working last year, and things could get pretty exciting going into the fall.

  10. I get the feeling that part of the reason why the precious metals demand in the west has dropped off these last few months is a combination of retail investors heading into the stock, property markets because its be honest, buy at all time highs has always worked out well. But also partly because the middle to ‘upper’ middle class who are likely to be buyers of the metals in the past, are desperately strapped for cash at the moment and even though they may well know the metals are a good investment, they just can’t afford to add more. Maybe the higher prices pay a small part in it too and they are hoping or waiting for a price drop. Just a thought

    • “retail investors heading into the stock, property markets because its be honest, buy at all time highs has always worked out well.”

      well there’s nowhere else for them to put it. and besides, it doesn’t matter, it’s like a millionaire buying a seat on a lifeboat for $10 million – if it works, hey, great! but if it doesn’t, well, you have more desperate things to worry about besides now-valueless paper currency.

      • But buying into property at this stage, regardless of how wealthy you might be isn’t like buying a seat on a lifeboat.. its like buying a seat on the ship. I would argue they do have a choice. That life boat is in the form of precious metals

        • “That life boat is in the form of precious metals”

          I’m remembering cortez’s conquistadores, loading up on aztec gold only to fall into the city’s canals and drowning, pulled down by their gold, during the battle to escape. what makes you think gold will be any safer a seat than property? the instant you pull it out then all eyes will be on you (“psst, hey local ruler, I know who has some gold! aren’t I a good boy?”) and if you don’t pull it out then it can’t help you.

          • because the metals will be getting bought for wealth preservation while property is being sold as investors dump their portfolios as their tenants are no longer paying the rent or defaulting on mortgages because they can no longer afford them with higher interest rates and and less discretional spending money. Precious metals will continue being bought by central banks and any desperate hedge fund looking to secure some of what cash is left from their now valueless paper assets in the stock and bond markets. Property will not be getting bought en masse while it is simultaneously being liquidated. A house would sink a ship much faster than a chest of gold. hpe you have a big boat lol

          • “because the metals will be getting bought for wealth preservation”

            won’t work. 1) gold as money will have utility only if there are functioning markets, and 2) if there are functioning markets they will be accompanied by a government that bans gold.

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