How big is the RETAIL PHYSICAL Gold mkt in the USA?

Don't forget that a lot of gold is bought at retail via jewelry and watch sales.

 

Log in or Sign up to hide this ad.

I just read blog from a trusted source that said US gold demand (physical) is 8-10% of global total. so we're not that big a deal overall. that says a lot about thinking here

 

Look at the WGC link on Page 1, here. In Q 3 2012, US Bar/Coin demand was 10.5 mt; global demand Bar/Coin was 294 m.t. The US is less than 4% the global bullion investment, retail! (Yes, I'm ignoring the junky vastly inflated kgold jewelry mkt as spurious, here.) 'Not a big deal' ? Ha, we're basically irrelevant to the current PM mkt. As investors, Americans own almost nothing.

Also, the USA had net gold exports of 103 mt in Q1 2012: so we're now exporting ~10x what we import?! Scrap Gold is flowing out of the US at ever higher rates than Americans are buying.

Compare & contrast the US share of global equity (proxy: MSCI All Country World Index). The USA is still ~40% of the paper-game. In addition to grossly overrated RE, American schlubs hold more overpriced USD$-denominated paper assets than anyone else. In each downdraft, we'll lose more & more. When the Perfect Storm hits (circa 2018-22) US investors will be totally wiped out - because they cling to nothing but spec/fantasy paper "investments." That's alarming, no?

What does this mean for American coin people?

1) It means that falling demand in our coin shops (however bad/good for US sellers/buyers) says much more about this peculiar feeble mkt than about global investment in PMs.
2) It means there is no 'Gold Bubble' in the USA ... and arguably never was (even in 1980.)
3) It means that Gold 'demand' by Americans isn't the story now either; on the contrary, Americans have been net losers to Cash4Gold scamers (SOLD, for 40 cents on the Dollar.)
4) It means that >99% Americans 'don't get' Gold and probably never will - 10 years later and multiples higher, they're still clueless. That's the success of Wall St. Paper-Bug brainwashing.
5) It means we watch China, India and European bullion buyers very very closely - or global demand for PM ETFs. That's where POG and gold-focus goes ... from here on out.

I'd humbly suggest "Stay the course!" keep accumulating on any future POG dips, converting Paper into Real Assets, etc. A truly parabolic price-move (circa 2020?) will only occur when millions of American Dollar desperados pouring whatever's left into something of real value. In the 20th C. Americans have never witnessed this but it did happen in failed Confederate currencies 1864-5 and with Continentals in the late 1770s. Likewise, hundreds of other countries' paper fiatscos: read up on those, history doesn't repeat but it usually rhymes.


Here's a chart of the German Mark during the hyperinflationary period:
View attachment 216986

Look what's been happening to the Iranian Rial since June 2012: memorize the chart pattern & formation.
View attachment 216985

Honestly, proof is always in the numbers. It's not about you, or me, or a friend in Idaho who thinks like us. The minuscule number of bullionists here (& on precious few similar web-forums) notwithstanding, trend is clear and has not changed. Americans don't get it! Too bad for them: pity the fool.

 

How much of your "gold export" numbers are from mines in the US? Don't forget, we are a fairly good sized mining nation, so it makes sense we EXPORT PM to nations that have no PM mines.

I imagine all of those mines in the new gold mining shows has to be selling their gold to someone.

 

I'm not certain yet, but looking for a rough estimate "Total RHODE ISLAND Exports and % Share of U.S. Total" where "WASTE & SCRAP GOLD EXCL SWPNGS CNTNG OTH PREC MTLS" is KGold bricks exported to Switzerland and elsewhere for refining @ POG 1572 ~50.83 m.t. whereas "GOLD COMPOUNDS" includes ore ~45.13 m.t. for Year 2011.

The big picture is probably here: USGS data for 2011
http://minerals.usgs.gov/minerals/pubs/commodity/gold/mcs-2012-gold.pdf

2011: Mines produced 237 >>> 190 m.t. of refined Au and recycled another 225 mt, plus imports - consumption & exports ~ + 415 m.t. So the USA was accumulating Au in 2011.

Another site shows US export stats for Oct 2011 - Sept 2012 'Gold Bullion Unwrought, Nonmonetary HTS Code: 7108.12.1010' $990 mln > $2.45 Bln per month .... back-of-the-envelope calc month by month avg POG : ~364.113 m.t
http://www.zepol.com/HTS-Export/7108121010.aspx

Also IMPORTED (same months & avg POG by my calc) 'Gold Bullion Not Less Than 99.95 Percent Gold By Weight, Unwrought, Nonmonetary... HTS Code: 7108.12.1013' ~70.964 m.t.

The net bullion export (Oct 2011 - Sept 2012) from USA appears to be ~293.15 m.t. Presumably, that's all Gold bar, ingot from mines & storage ... and Mint coin? (There's a "monetary" category I cannot find data for.) These numbers are waaaay higher than US coin/bar consumption of the WGC; I don't know what I'm missing or how to tie together these diff sources.

I still think it shows US retail buyers are a tiny part of what's happening, both imports/exports.

 

Not disagreeing with that sir. I have first hand knowledge of how much more important this trade is in foreign countries than the US. I was just throwing it out there to make sure we consider that the US is a miner of the metal, and not assume any exports is necessarily meaning net loss of gold holdings inside the US.

 

The East is accumulating all the wealth, and we are spending money we don't have on things we don't need. It's an unfortunate turn of events, but that's what happens when children are raised by TV, when the family institution is replaced by the state, and our God given rights take second fiddle to greed and power. The things that made the USA great have been abandoned. A nation can't remain prosperous by pushing digits around. I have little doubt that anyone buying gold and silver today will be considered rich by future generations in the US, simply by contrast to how poor the common person will be. I truly hope I am wrong about that.

 

This isn't quite what you're asking for, but I think it's still a good look into market psychology.

As Per (great article):
http://www.financialsense.com/contributors/steve-angelo/the-coming-paradigm-shift-in-silver

 

Thank you InfleXion! That's where I'm going with this, more or less.

I used to counter the Paper-Bugs argument (for at least 6 years now) that tons of noobs were buying Au/Ag with SHOW ME THE NUMBERS (they couldn't) and so 'NO, IN FACT THIS IS NOT A BUBBLE' (because US investors own no Gold and have not participated in this asset-class at all, if ever.)

1) The US Retirement Mkt has shown no interest in PMs: 'No interest' means 'No Bubble' and it really is that simple.
2) This corollary follows: 'YES when US investors finally pile $Trlns into PMs it should indicate a Bubble' or 'YES when US PM allocation rises back to 15% that should indicate a Bubble'

My underlying premise (which I'm now ready to doubt or contradict) has been that 'A GLOBAL BUBBLE IN X CANNOT EXIST UNLESS THE LARGEST MARKET SHARE IS FULLY INVESTED IN X.' Sure, the US retail investor has probably always been a low-information participant, but - what I didn't consider - we can miss future global Bubbles because we're already sidelined, irrelevant, locked in the padded cell. The dumbest money on the planet - trapped in 401ks - is as duped by Wall Street propaganda as the loyal Soviet Citizen ever was to the Bolsheveiks' lies.

Scary conclusion? We (99% of Americans) cannot and WILL NOT ever move into PMs: we're totally in thrall to the Paper con, cannot see the forest for the trees. So US retail money is a poor gauge of anything but utter foolishness, by the numbers... the US mkt will never "show" a PM Bubble, so long as the Dollar Regime lasts.

(And YES, the Paper Fooled will eventually lose everything - up in smoke it must go! "Got Gold?")

Sidenote: I'm surprised no one has yet mentioned Dmitry Orlov (CT Search reveals no mention of his name) - his work is excellent & informative. Last I heard, he was a live-aboard in the Boston Harbor, LOL
http://en.wikipedia.org/wiki/Dmitry_Orlov

 

I would counter that the people who actually CARE about PM has always been fairly small. This has been true for a very long time, even when coins were made out of silver and gold why would paper money be so much more popular? Even when paper money was no longer backed by PM people could care less.

Given this market has always been pretty small, the new participants are increasing demand MUCH higher than historical demand. Why is it Juan you are defining a bubble as "the largest market share is invested"? Where does that definition come from? My understanding of a bubble is highly speculative buying above its long term value, usually by new participants to a market. After these new participants leave, the market returns to previous levels. This was true of the housing bubble, (people who couldn't afford houses buying), true in the dot com bubble, ("day traders" and other ill informed investors), so why now all of the sudden are you putting new definitions into what constitutes a bubble?

I am not arguing we are necessarily in a bubble. but when people hear I am a coin collector nowadays many times they ask me how to invest in PM. That NEVER used to happen, (I used to get the "oh poor you" look, long time collectors will know what I am talking about). These new participants worry me some, but more worrisome is worldwide new participants. What will happen if China decides its against the party's interest for citizens to own PM? India has already jacked up import tariffs on gold, and Turkey is intentionally trying to get everyone to put their gold in banks so they can stop importing gold.

You are right, there are more new participants internationally than domestic, but all are new participants that we do not know their long term interest in holding PM. That is the danger in these prices, plus when all of the new production will come onstream in response to higher prices.

Btw, investors "duped by wall street"? I believe you are insulting individual investors. Where else can 401k plan participants invest their money other than funds in the plan? I am a trustee of one of these, and have made sure our participants have access to a commodity fund at least, something which 99% of 401k's have not.

 

I see PMs as 'money' (or what the World Bank President referred to as "an alternative monetary asset") and demand for that commodity has NEVER been small. Rather, it's 'this or that' - the Dollar or Gold - not really a new concept either. But no, the market was never "small" : you're betraying an Americanist illogic there.

I've worked in the biz more than 15 years, wearing all the hats: designing 401k Plans, consulting to 401k Plan, even creating product for fund companies. You're right too: plan participants have almost no other choice (but really: it only 'works' as a savings gimmick w/ company match.) That's too bad though, and more to my point: our 'wealth' has been enslaved to plan providers.

What commodity fund did you add, btw? ING Direct ShareBuilder 401(k) is the only provider with ETFs (I thought) but that's slowly starting to change.

 

Of course, if you view gold as "Money" then there is no upper limit to how much "money" people want. Any American would take an ounce of gold, since it has a value. However, how many of them would part with approx $1700 for an ounce? That number is terribly small. It used to be even smaller, but has increased. That is the number I concentrate on, I believe we have a tiny percentage of "natural" buyers of PM, but there are many new members of that group. I am concerned how long these new members will stay in this group, or will they dump PM when something else catches their eyes.

Personally, I view gold as a commodity, like any other commodity. Its highly storable, and compact, though, so it is VERY useful way of owning commodities cheaply.