BY SRSROCCO
The U.S. gold exports to Hong Kong surged in February consuming nearly all of the domestic gold mine supply. According to the USGS recent Gold Mineral Industry Survey, February gold exports to Hong Kong more than doubled compared to the prior month. This was an interesting increase in gold demand from Hong Kong as the market price increased slightly month over month.
Not only did gold exports to Hong Kong jump, but total U.S. gold exports also increased 40% from 36.1 metric tons (mt) in January to 50.4 mt in February. The top three countries that received the majority of U.S. gold exports were Hong Kong (15.5 mt), the United Kingdom (12.1 mt) and Switzerland (11.7 mt).
As we can see in the chart below, U.S. gold exports to Hong Kong jumped from 7.2 mt in January to 15.5 mt in February:
Furthermore, total U.S. gold exports to Hong Kong were 25 mt from July 2017 to Jan 2018 compared to 15.5 mt in February. The large increase in Hong Kong gold demand consumed nearly all of U.S. domestic mine supply:
Total U.S. gold mine supply in February was 15.8 mt versus the 15.5 mt exported to Hong Kong. The majority of U.S. gold mine supply came from Nevada (11.4 mt) and Alaska (1.9 mt), with the remainder from various states (2.4 mt):
According to the USGS table above, total U.S. gold mine supply for Jan-Feb was 33.7 mt. If we add up all U.S. gold mine supply and gold imports and subtract total gold exports, the United States suffered a net 16.6 mt deficit for the first two months of the year.
JAN-FEB 2018 Surplus-Deficit:
Gold Mine Supply = 33. 7 mt
Gold Imports = 36.2 Mt
Gold Exports = -86.5
Net Deficit = 16.6 mt
Now that net deficit figure above does not include U.S. gold scrap supply or demand. However, I would imagine American gold demand was higher than gold scrap supply, so the net deficit is actually even higher.
Regardless, the West’s gold continues to flow to the East. Even though the U.S. exported nearly 24 mt of gold to the U.K. and Switzerland in February, I would imagine a large percentage of that gold ends up in China, India and Southeast Asia.