Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

US Gold Market Saw a Deficit in 2017

  by    0   0

The US gold market went into a deficit last year despite sluggish American demand, according to analysis by SRSrocco.

Demand for gold fell in the US from 212 tons in 2016 to an estimated 150 tons in 2017. A 56% decrease in demand for gold bars and gold coins through the first three quarters of last year was a primary factor pushing overall US demand for the yellow metal lower. Peter Schiff talked about sagging US investment in gold last summer during an interview at International Metal Writers Conference noting that a lot of the investors who typically buy gold in America voted for Trump, and they’re no longer worried about the economy. As a result, they’re not buying gold. They’re buying stocks instead.

So what accounts for this deficit in the US gold market?

Americans are exporting large amounts of gold.

In 2016, the United States imported 374 of gold and exported 398 tons for a relatively small 24-ton deficit. But analysts estimate US gold imports fell to around 250 tons in 2017, while exports increased to an estimated 475 tons. That equates to a 225-ton net export deficit for last year. When you factor US mine production and scrap supply into the equation, the US gold market ended up with a 76-ton net total deficit last year.

Gold appears to be flowing from west to east. Demand for the yellow metal surged in India during 2017. Demand was strong in China throughout most of last year as well. The Germans also have a budding love affair with gold where demand increased by a healthy 45% in Q3 2017. German demand helped spur healthy inflows of gold into European based ETFs. European funds took in 75% of global inflows last year, adding 148.6 tons of gold.

SRSrocco said the gold deficit could have serious ramifications in the near future and raises an important question: What happens when the bubbles burst, markets crack and Americans suddenly decide they want to buy gold?

This happened in the first quarter of 2016 when the Dow Jones Index only fell 2,000 points in a few months.  Gold ETF inflows surged to the second highest quarterly amount ever at 350 tons.  The all-time record of quarterly gold ETF inflows took place during the first quarter of 2009 when the Dow Jones was crashing towards 6,600.  During the Q1 2009, gold ETF flows were a staggering 465 tons. While precious metals sentiment is currently depressed due to the surging stock and cryptocurrencies, at some point, we are going to see a crash in these two markets.  The amount of leverage in both markets is off the charts. I believe the next market crash will cause more investor fear than ever.  We could see gold ETF inflows surge above 500 mt while physical bar and coin demand beats all records.”

Get Peter Schiff’s latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Imports of Gold into China via Hong Kong Surged Last Month

Imports of gold into China via Hong Kong surged in March, rising 78.67% compared to February. The amount of the yellow metal moving into mainland China via Hong Kong rose to 59.4 tons in March, up from 33.25 tons in February, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.  Related

READ MORE →

Peter Schiff: Why Own US Stocks?

man with umbrellaStock markets had another bad day Tuesday. The Dow Jones fell over 400 points as the 10-year Treasury yield broke through 3%. Several “marquee” companies warned of higher costs, including Google-parent Alphabet and Caterpillar. In his latest podcast, Peter Schiff said he thinks the correction is over. Not the downward move. That is not the […]

READ MORE →

Fed’s Underlying Inflation Measure Close to 12-Year High

Inflation is low – so we’re told. But this simply isn’t true. Now, it is true that the consumer price index (CPI) has remained relatively low. But rising prices aren’t in-and-of themselves inflation. In fact, we can have inflation without a corresponding rise in CPI – at least in the short-term. That’s exactly what we’ve […]

READ MORE →

WGC Report: Weakening Dollar Tends to Support Rising Gold Price

Conventional wisdom holds that rising interest rates are bad for gold. The fact that the Federal Reserve has been nudging rates up over the last couple of years has accounted for a lot of the bearishness in the gold market. But the conventional wisdom doesn’t line up with the current reality. Even as the Fed […]

READ MORE →

Peter Schiff: The Fed Is Like Mr. Magoo

Last week, Peter Schiff said we may well be in the calm before the economic storm. In his latest podcast, he said the storm may be on the horizon. But most people are still oblivious, including the Federal Reserve. Related

READ MORE →

Comments are closed.

Call Now