U.S. Gold Production Down 11% In October

According to USGS, U.S. gold production declined 11% in October compared to same month last year.   This was due to lower seasonal production in Alaska and lower grades at Rio Tinto’s Bingham Caynon Mine in Utah.  U.S. gold production in October was 16.8 metric tons (mt) compared to 18.9 mt last year.

Even though domestic U.S. gold production was down significantly in October, it has trended lower throughout the year.

US Gold Production JAN-OCT 2014

Total U.S. gold production from Jan-Oct declined 8% to 176 mt, compared to 191 mt during the same period in 2013.   The biggest drop in gold mine supply came from Nevada as Jan-Oct was 126 mt, or 9% less than the 140.4 mt during Jan-Oct 2013.

This is quite interesting to see that Nevada is suffering the worst declines when many of the major mining companies in the state such as Barrick, Newmont and GoldCorp are high-grading their mines.  I thought for sure, we would see higher production this year, when the opposite is the case.

If the trend continues for the remaining two months of the year, U.S. Gold production will probably come in at 211-213 mt compared to 230 mt in 2013.

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12 Comments on "U.S. Gold Production Down 11% In October"

  1. Steve

    What’s your thoughts on these recent builds in oil inventory? My thought, and I’ve often said this about the silver market, if you really want physical silver in size then you have to drop the price to pennies on the dollar. My reasoning, a rising price encourages hoarding, a falling price creates desperation which lead to panic selling. While this makes sense in the silver market, I have a hard time making this same case in the oil market, although it seems to be following the same path. As the price of oil falls more and more oil is finding its way into storage. I don’t see demand collapsing, so the producers have to be desperately dumping oil at any cost driving storage levels higher.

    I’m surprised that oil at this price is not driving demand even higher.

    • Tas,

      The oil market is a bit different than most markets. You’re right, global oil demand hasn’t fallen that much, maybe 400-600,000 bd. However, supply continues to increase, mostly from Expensive Crap Shale Oil. So, yes the oil has to go somewhere.

      Demand doesn’t increase unless there is economic growth. A falling oil price does not correspond with more consumption. In 2009, the Saudi’s cut oil production by 2 million barrels per day, which was part of the reason why oil prices recovered in 2009.

      No one’s cutting. They are playing CHICKEN to see who cuts first. Furthermore, the Saudi’s, Russians and other Middle Eastern countries could cut production quite easily… however the U.S. cannot. Once we cut back on Shale Oil production… it goes into collapse mode.

      2015 will certainly be interesting to say the least.


      • ” however the U.S. cannot. Once we cut back on Shale Oil production… it goes into collapse mode.”

        This is a great point. If Shale cuts back, the debt that already will be hard to service will be impossible to service—which will collapse the junk bonds. If they cut back, their debt gets impaired, it will be too late by then to simply start drilling again–and who will want to loan them money then?

        This whole thing is shaping up to be BIGGER then Lehman and Subprime. This is going to blow the world up.

        Gold should be good in that chaos.

        • frank,

          Precisely. Not on does production decline if the RABBITS don’t continue to drill like mad, but the huge debt on these companies balance sheets with less ability for CREDIT for CAPEX SPENDING will make a bad situation worse.


  2. It’s good to hear that gold is still hard to get out of the ground. The price since 2011 was starting to make me think someone had figured out how to extract it cheaply from sea water.


  3. Goldcorp’s CEO has said that we are AT PEAK GOLD starting likely THIS YEAR in their presentation called “Peak Gold.”

    Unlike Oil, there is a supply deficit along with a peak in production. That is why gold is now beating the S + P 500 over the last 12 months and why it will keep beating the US stock market. The fundamentals are sound.

    Plus, if the Fed REALLY raises rates the junk bond market in oil will wreck havoc on financials, employment, and ultimately the stock market. Turmoil and fear will be great for gold.

    Good luck all,

    P.S. Go buy German stocks to hedge your gold positons.

  4. What did i tell you?Without Inflation silver is worthless.Soon you habe to pay when you want to sale it.
    6.24% Minus.Wow.What a Money burner.

  5. Western speculators (bullion banks, hedge funds, central banks) can explain silver at 5 or 50 dollars but it is just that they prefer 5 over 50…

  6. Thank you for the detailed information. With this and one of your article earlier this week about the exports from the US, gold may be the only place to run.

  7. Silver getting absolutely slammed today. At one point down 7%. Anyone have any thoughts on this latest smackdown? Honestly, I don’t have a clue.

    • Here is your clue:

      “Silver traded more or less flat in Far East trading on their Thursday morning—and briefly penetrated the $18 spot price mark in early morning trading. Then, starting at 1 p.m. Hong Kong time, “da boyz” showed up—and by 10:40 a.m. EST, they had the price down about 60 cents. Then the HFT algorithms kicked in—and the low tick was printed about 12:20 a.m. EST. Then, like gold, it rallied a bit into the close.”

      ” So, are we done to the downside? Perhaps—for the moment. But if forced to bet ten bucks, I’d bet that JPMorgan et al are far from through. Even though there was big down-side price/volume action yesterday, the Big 8 short holders still hold an historically large short position in both silver and gold—and only the timing of the next engineered price decline remains in doubt. It could be today, next week, or next month—but it’s coming.

      Could they get over run? Sure, but these guys have hijacked the price mechanism so thoroughly that it matters little as to what might happen in the real world.

      The one thing that should be pointed out, is that the big price smashes yesterday should have come as no surprise to anyone who reads this column on a daily basis, as both Ted Butler and I have just been sitting and waiting for “da boyz” to pull the trigger—because as I said in Wednesday’s missive “the danger flags are snapping in the wind”.”

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