In just the past two years, U.S. gold scrap exports declined an amazing 80%. What’s going on here? Is the U.S. starting to run out of gold scrap? Either the U.S. is running low on gold scrap to export or the market is refining more to fill the huge amount of domestic and foreign bullion demand.
U.S. gold scrap exports fell off a cliff in the past two years. I believe the majority of Americans have already sold whatever gold scrap they had and are now for the most part… tapped out.
Regardless, U.S. gold scrap exports in 2013 fell to their lowest level in years. According to the USGS Gold Mineral Industry Surveys and Yearbooks, U.S. gold scrap exports fell from 886 metric tons of gold (gross weight) in 2008, to 128 metric tons (mt) in 2013.
Some believe the decline in gold scrap exports in 2012 and 2013 were due to the fall in the price of gold. While this may be true in 2013, it was not the case in 2012. The average price of gold in 2012 ($1,669) was higher than in 2011 ($1,571).
We can see that U.S. gold scrap exports fell 60% from 663 mt in 2011 to 266 mt in 2012, even though the price of gold was nearly $100 higher in 2012.
The collapse in U.S. gold scrap exports are more apparent when we compare the total amount in 2013 to the individual countries in to 2011:
In 2011, the U.K. imported more than double the gold scrap from the U.S. (260 mt) compared to total exports in 2013 (128 mt) and nearly the same amount as in 2012 (266 mt).
Interestingly, two of the top four importers of U.S. gold scrap in 2011, Switzerland and the United Kingdom, are the leading exporters of gold bullion to Hong Kong.
When I first wrote about this subject in my article, Is The U.S. Running Out Of Gold Scrap, the U.S. exported 121 mt of gold scrap by the end of October of 2013. After the USGS released their final data for 2013, total gold scrap exports were only 7 metric tons for Nov & Dec.
Which means… the present decline trend of U.S. gold scrap export supply, continues to fall even faster. In the first ten months of 2013 gold scrap exports averaged 12.1 mt, however, in the last two months it fell two-thirds to 3.5 mt.
We can only speculate why this is taking place, but the data sure does paint a very interesting picture.
Very Strange U.S. Gold Scrap Import Data in 2013
Something very odd took place in 2013 as it pertains to U.S. gold scrap imports. I spent the better part of the day trying to locate sources who could explain this large anomalous gold scrap import figure in 2013.
If we look at the chart below, U.S. gold scrap imports remained quite low since 2007… a fraction compared to exports. From 2007 to 2011, gold scrap imports ranged from 36-50 mt, and then picked up substantially in 2012 to 116 mt.
Then in 2013, total gold scrap imports ballooned to 286 mt. When I first checked the data, I thought this large increase came from many countries, but when I looked closer, I realized 221 mt of this amount came from one small country in South America… Suriname.
This is the very same country in which GATA secretary, Chris Powell went to visit back in February to help educate the government officials in Suriname on the subject of “Gold Price Supression.” Powell spoke about this during an Interview on King World News.
Something seems highly suspect here. While there is one large gold mine (Newmont) operating in Suriname, where on earth did the country come up with 221 mt of gold scrap?
As I mentioned, I spent a great deal of effort trying to get to the bottom of this large Suriname gold scrap export, but no one could offer a good explanation — the tragedy of a highly specialized system where the left hand knows not what the right hand is doing.
One thing is for sure, U.S. gold scrap exports fell off a cliff in the past two years. I believe the majority of Americans sold whatever gold scrap they had and are now for the most part… tapped out.
I spoke with USGS Gold Specialist, Micheal George on the subject of gold scrap last year and he told me (according to his sources), that the gold scrap market was now refining lower quality scrap because the low-hanging fruit was gone (paraphrasing).