WHAT’S GOING ON??? Record Swiss Gold Flow Into The United States

There was a huge trend change in U.S. gold investment in May.  Something quite extraordinary took place which hasn’t happened for several decades.  While Switzerland has been a major source of U.S. gold exports for many years, the tables turned in May as the Swiss exported a record amount of gold to the United States.

How much gold?  A lot.  The Swiss exported 50 times more gold in May than their monthly average (0.4 mt) since 2015:

U.S.-Gold-Imports-From-Switzerland-Montly

As we can see, the Swiss gold exports to the United States are normally less than 0.5 metric ton a month.  And for many months there weren’t any gold exports.  However, something big changed in May as Swiss gold exports surged to 20.7 mt (665.500 oz).

The overwhelming majority of gold flows from the U.S. have been exports to Switzerland and the United Kingdom (U.K.):

Top U.S. Gold Exports 2001-2013

Furthermore, as I have mentioned in precious articles, the U.S. has been exporting more gold than it produces and imports.  However, this changed in May as the Swiss exported more gold to the U.S. in one month than they have every year going back until 2000:

U.S.-Gold-Imports-From-Swittzerland-(Aunnual)

Why the big change?  Could this have had something to do with the huge gold price since the beginning of 2016, or maybe was it due to political changes such as the upcoming BREXIT vote in June?  Of course the BREXIT vote is now history as the British citizens voted to leave the European Union.

However, something motivated this huge trend change in normal gold movements to Switzerland.  Moreover, total U.S. gold imports in may shot up to 50 metric tons, almost double the 26.5 mt figure in April.  In addition, total U.S. gold exports hit a low May as only 20.2 mt were shipped to foreign countries.  Total U.S. gold exports Jan-May 2016 of 139 mt are down 28% compared to 195 mt exported during the same period in 2015.

So what’s going on here?  Why the declining U.S. gold exports or surging gold imports from Switzerland?  Are foreign countries demand less gold??  I doubt it.  Or how about the massive increase in supposed gold flows into the Global Gold ETFs & Funds??  While there is no way of knowing how much gold these Gold ETFs & Funds hold, something seriously changed in May as the Swiss exported more gold to the U.S. in one month than they have every year for several decades.

Are wealthy Americans finally acquiring a lot more gold?

It will be interesting to see that data for the next few months when the USGS releases their Gold Mineral Industry Surveys.

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31 Comments on "WHAT’S GOING ON??? Record Swiss Gold Flow Into The United States"

  1. Saw this at Zero Hedge, but have been changing course and going directly to the source, where commentary is more constructive.

    Sounds to me like you suggest that wealthy in US are suddenly importing more gold as they realize the paper gig may be up, that ETFs and even foreign storage facilities with so called “allocated gold” are just that, allocated to anyone( a newly emergent dictator for example) in that country who suddenly decides he wants to take physical possession of the country’s assets.

    • OutLookingIn | July 26, 2016 at 12:10 am |

      Hubbs says:

      “where commentary is more constructive”.

      I salute you! I don’t know what the problem is at Zero Hedge recently, but they have changed their editorial style, from being very ‘edgy’ and out front on issues that other news outlets would avoid. I hope they return to the style that made ZH such a go-to site for up to the minute edgy news.

      As for the commentary sections, they have decomposed into nothing more than half witted, sophomoric, idiotic, oft repeated banalities. Not worth the waste of time to wade through, to find a nub or two of intelligent input, that is immediately set upon by hoards of inane comments.

      Welcome to SRS where you will find what you seek – knowledge with discourse .

  2. Mike in Denver | July 25, 2016 at 3:37 pm |

    I wouldn’t be surprised if there is a deal to let the US get some gold before the reset. My guess is this is in the new “four 9 k” format rather than London Good Delivery.

  3. pintergast | July 25, 2016 at 5:08 pm |

    Interesting that there are about 20 tons standing for July delivery and that’s just about the amount we’ve imported from the Swiss this month. Coincidence?

  4. I think something happened in April and they reacted to it in May. It takes time to react to a political or financial change of the wind. Or perhaps something is being planned after May and they need to get ready now.

  5. I think something happened in April ( 19 April when the launching of RMB quoted Gold Price Benchmark by SGE? ) and they reacted to it in May…

    Again what a coincidence!

  6. I think pintergast nails it. That’s a very simple and logical explanation. Because Steve is on top of the situation, he knew of that possibility right away. He wrote this article as a sort of a teaser, and to see if any other ideas were proposed. That’s why so many sentences end with a question mark.

    The folks who have to deliver the gold don’t already own it, and they know they have to come up with it, so they order it in, just like Papa John’s Pizza. They can’t source the massive quantity domestically, so they get it from Swiss refiners. The moment they don’t come through with it, the jig is up.

    That brings up the next question: Why is it, given that the U.S. submitted the winning bid for those 20 tons, that there are still sufficient supplies to fill orders from other countries without driving the price up? Or was that order, submitted a few months ago, the reason for the the recent upsurge in the gold price? Now that the order has been filled and perhaps no further large order is forthcoming from the U.S., worldwide demand has settled down, and the price has eased downward.

    Fascinating topic, suggesting a very tight physical market as Steve (and also Rob Kirby) has mentioned. So many analysts really don’t have a clue because they don’t look at the underlying bits and pieces to put it all together the way Steve does.

    Charley Z

    • “That brings up the next question: Why is it, given that the U.S. submitted the winning bid for those 20 tons, that there are still sufficient supplies to fill orders from other countries without driving the price up?”

      Who said other countries were getting their entire orders filled during the time this order was being filled for ??? in the U.S. The U.S. has a big political, financial, and military stick to “convince” others with, that it is in their best interest for the U.S. to belly-up to the buffet table.

      I suspect you guys are right…the metal was needed either to keep the rigging system going, and/or for the wealthy to engorge upon. Does anyone know who that physical went to? I guess that doesn’t matter; it can get moved around.

  7. Switzerland also exported another 20 tonnes of gold into the U.S. in June. You may want to check out my article on Swiss gold flows on seekingalpha – Swiss Gold Stats Point To Big Continuing Supply/Demand Anomalies – and on sharpspixley.com – June Swiss gold statistics highlight continuing reverse gold flows. Swiss stats have seen a big reversal of normal gold flows so far this year. Its biggest source of gold coming in has been the United Arab Emirates – normally a destination for Swiss gold exports – while the biggest importer of Swiss gold has been the UK (normally an exporter of gold to Switzerland, like the USA, while the U.S. was the third biggest recipient of Swiss gold in June (more than India! I have surmised that these abnormal flows from Switzerland into the UK and USA could be due to a significant supply squeeze for available non-attributable gold in London and COMEX vaults to meet the big flows into the gold ETFs so far this year

    • Do you think the ETF’s have all the metal they purport to have?

    • Re my earlier post I think the figure Steve reports for Swiss gold heading into the USA in May is the same as my figure from the Swiss Customs Administration for June m- perhaps they’ve come from two different sources. To clarify the figure I have from the Swiss Customs Administration for Swiss gold exports to the USA for May is 19.4 tonnes, so the USA has imported just about 40 tonnes from Switzerland over the past two months.

    • rowingboat | July 27, 2016 at 8:57 am |

      “Swiss stats have seen a big reversal of normal gold flows so far this year. Its biggest source of gold coming in has been the United Arab Emirates – normally a destination for Swiss gold exports”

      Many years ago UAE used to be a major destination for Swiss gold exports (past tense), every year all the way from 1982 to 2005. But with progressively higher gold prices during the last bull market, UAE net imports from Switzerland progressively declined until it reached the point from 2006, that UAE flipped and became a predominantly net exporter to Switzerland; and whose exports to Switzerland have intensified this year with the surging gold price.

      Second, to answer the question why the US is importing significant gold from Switzerland, is simple. In 2016 America is hoarding gold again at a very similar level to what it was in the early to mid 2000s. However, America is internally supplying from its local mine production significantly less gold than it was back then… so it needs to import more… at the expense of flows to the East whose markets are very price sensitive as witnessed by the substantial changes in the Swiss –> UAE/India/HK/China/Thailand flow dynamic in 2016.

      A secondary reason aside from a drop in mine production, is that America’s scrap supply (as measured by the USGS) has fallen substantially since the gold price peaked in 2011. Hence this all explains why imports from Switzerland have needed to increase to compensate for decreasing internal supply (recycling and production) as America’s net demand for gold turns positive again.

  8. peter johnson | July 26, 2016 at 12:50 am |

    Perhaps they’re just getting rid of their, soon to be worthless, dollars??

  9. Richard Sandoval | July 26, 2016 at 8:18 am |

    Does the average person subconsciously yearn to have a printing press in their basement?
    You can’t print gold or silver, unless you have some buried in your basement.

  10. Re ETFs holding the gold they say they do: I don’t know about them all but i suspect most do. i don’t have doubts about GLD or IAU for example, although some others do.

    • Lawrie Willaims,

      Thanks for stopping by and leaving comments. I agree with you on gold held at some of the ETF’s. I know the gold metal at ETF Securities Investments is likely all there, but I highly doubt the GLD ETF holds all the gold they report. And of course, it’s more complicated as the bars that the GLD reports to have in its vaults may be owned by several investors-parties.

      I also recommend my readers checking out Lawrie’s site a Lawrie On Gold.

      https://lawrieongold.com/

      steve

    • OutLookingIn | July 27, 2016 at 11:22 am |

      “I don’t have doubts about GLD…”

      From the GLD Prospectus:
      “In accordance with LBMA practices and customs, the Custodian does not have written custody agreements with the subcustodians it selects. The custodian’s selected subcustodians may appoint further subcustodians. These further subcustodians are not expected to have written custody agreements with the custodian’s subcustodians that selected them.”
      The “Custodian” who buys and stores gold for GLD is HSBC. Which is an international criminal organisation, with a proven history rife with unethical behavior.

      The “Chain of Custody” in the GLD prospectus is so shot full of holes, as to make it a perfect accident waiting to happen. Doubts? Seems absolutely cut and dried. What could go wrong?

      • “In accordance with LBMA practices and customs, the Custodian does not have written custody agreements with the subcustodians it selects. The custodian’s selected subcustodians may appoint further subcustodians. These further subcustodians are not expected to have written custody agreements with the custodian’s subcustodians that selected them.”

        that’s hilarious. there’s only one way this “arrangement” could work, and that’s if the custodians and sub-custodians are members of the same family or other similarly close tribal unit.

  11. peter johnson | July 26, 2016 at 10:07 am |

    Iv’e heard reports of up to 100 claimants per 1 ounce. If they all demanded the metal, what would the end result be?

    • “If they all demanded the metal, what would the end result be?”

      Financial chaos would be my best guess.

    • they’ll be paid in fiat debt. freshly printed or instantiated if necessary. or they’ll be told to wait three months, by which time they’ll be too busy looking for food to care ….

  12. Brettholomew | July 26, 2016 at 11:21 pm |

    This is just related to trade misinvoicing. A lot of gold has come onto the market in the last few months. Martin Armstrong has a blog post about it.

    https://www.armstrongeconomics.com/markets-by-sector/precious-metals/gold/trade-misinvoicing-78-billion-of-missing-gold/

    • Brettholomew,

      Of course, if Martin Armstrong says it, its true. I would like to remind you that Martin Armstrong DOES NOT BELIEVE IN PEAK OIL… or the FALLING EROI. While I would believe there is a lot of “misinvoicing” going on, it has been going on for a while. It doesn’t just POPUP one month as a large Swiss gold export to the United States.

      I received an email from a reader saying this was a move of Gold assets that are not subject to negative interest rates. That seems a HELL of a lot more valid than Martin’s reason.

      steve

  13. rowingboat | July 27, 2016 at 8:55 am |

    “Swiss stats have seen a big reversal of normal gold flows so far this year. Its biggest source of gold coming in has been the United Arab Emirates – normally a destination for Swiss gold exports”

    Many years ago UAE used to be a major destination for Swiss gold exports (past tense), every year all the way from 1982 to 2005. But with progressively higher gold prices during the last bull market, UAE net imports from Switzerland progressively declined until it reached the point from 2006, that UAE flipped and became a predominantly net exporter to Switzerland; and whose exports to Switzerland have intensified this year with the surging gold price.

    Second, to answer the question why the US is importing significant gold from Switzerland, is simple. In 2016 America is hoarding gold again at a very similar level to what it was in the early to mid 2000s. However, America is internally supplying from its local mine production significantly less gold than it was back then… so it needs to import more… at the expense of flows to the East whose markets are very price sensitive as witnessed by the substantial changes in the Swiss –> UAE/India/HK/China/Thailand flow dynamic in 2016.

    A secondary reason aside from a drop in mine production, is that America’s scrap supply (as measured by the USGS) has fallen substantially since the gold price peaked in 2011. Hence this all explains why imports from Switzerland have needed to increase to compensate for decreasing internal supply (recycling and production) as America’s net demand for gold turns positive again.

  14. From a purely geopolitical aspect, seeing this kind of spike makes me think conflict, or the fear of it. Interesting times.

  15. peter johnson | August 1, 2016 at 10:26 am |

    Is Fort Knox barren???

  16. Mark Stevens | August 6, 2016 at 9:50 pm |

    In June the FRBNY released 30.2 metric tons that it holds in custody for foreign countries. Could it be that this demand could not be met from the NY Fed vaults and so in May they had to import 20 metric tons from Switzerland?
    http://www.federalreserve.gov/econresdata/releases/intlsumm/forassets20160731.htm

    I have an Excel spreadsheet, which does the calculations of metric tons from millions of USD and using the official $42.22/toz price of gold, with the data and graph if you want them.

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