I am wondering what effect (if any) Iran's secretive Gold trade has had on global bullion prices. Since late 2008, it seems Iran has been buying up Gold through numerous gateways, to circumvent sanctions. The Turkey-Iran Gold story isn't exactly news but hints at a much bigger trade ... distorting/inflating the global bullion market ~+25% or so? Has anyone else been following this story? Throughout this decade, Turkey has been one of the world's top five buyers of gold bullion. In 2007, Turkey imported 231 metric tonnes (USD$ 5.7 bln) and exported 157.8 m.t. of processed gold, worth $3.7 billion. Of total Gold production in 2007, 265 m.t (~73%) was jewlery (export & domestic; higher valuation) and 73 m.t (20.2%) was investment-grade Gold Coin/Bullion. In Turkey - U.S. Trade Talks in early 2008, State Minister Tuzmen reported Turkish Gold export to the USA was $300 mln, the largest part of their trade w/ the USA. Of Turkey's Gold Coin/Bullion Production in 2007, it was estimated ~10 m.t. was exported ($301.5 mln) and 63.2 m.t. ($2 bln) "hoarded." http://www.turkey-now.org/db/Docs/Sector Reports/Sector Reports 2008/JEWELLERY.pdf In 2008 Turkey's total Gold export rose to $5 billion; its largest market no longer the United States ($209 mln, jewelry) , the Turkish Gold export to the USA fell by 1/3rd! Countries such as Azerbaijan, Kazakhstan, Kyrgyzstan and Turkmenistan (Iran's close neighbors, and fronting?) were increasingly imports of Turkish Gold at this time. In 2008, "rising scrap sales meant refineries minted so much bullion in Turkey that it was exported for sale on the international market -- a new trend for the country." But other weird things were reported, including Gold exports FROM Iran TO Turkey in 2008 and 2009: http://www.guardian.co.uk/world/2009/sep/17/imf-investigate-turkish-treasury-money Data from the USGS Minerals Report for the Middle East for 2008 (Sept 2010) suggests Iran has been importing/routing 'investment Gold' via UAE since 2008 at least. http://minerals.usgs.gov/minerals/pubs/country/2008/myb3-sum-2008-middle-east.pdf "Until the end of 2008, the UAE gold refineries produced gold that was used entirely by the jewelry market. After 2008, refined gold was often used as an investment product, such as in exchange trade funds and gold futures (Shekhar, 2010) ... The value of gold trade at the Dubai Multi Commodities Center (DMCC) increased to $29 billion in 2008, which was an increase of 53% compared with a value of $19 billion in 2007. The volume of gold exports in 2008 increased to 371 mt from 287 mt in 2007, or by 29%. The volume of gold imports in 2008 increased to 674 t from 559 t in 2007, which was an increase of 21% (Dubai Multi Commodities Center, 2009). According to the Turkish newspaper Hürriyet Daily News "The export figure {All Exports, to Iran} was about $2 billion in 2008 and 2009, $3 billion in 2010 and $3.6 billion in 2011, according to data from the Ministry of Economy." It's not clear was part was Gold, in 2011, Turkey's official Gold export to Iran was ... LOL ... just $7,500. !!!! Realistically, Turkey's Gold Export to Iran has grown exponentially in 2009-2012. In 2012, Turkey's Gold export to Iran rose to an estimated $14.3 bln/ann. "The figures show Turkey exported $1.2bn of gold in October alone, bringing exports of the precious metal for the year so far to $11.9bn, 9.5 per cent of the country’s total exports – compared with 0.8 per cent for the same period a year before. Ankara recently acknowledged that Iran was buying gold with the receipts from its gas sales to Turkey and shipping bullion out of the country" http://www.ft.com/intl/cms/s/0/e1b320ba-3b16-11e2-b111-00144feabdc0.html#axzz2ENedORzh In Summer 2012, most of the Turkey-Iran gold trade routed via UAE: "In August, Turkish government statistics show that the UAE suddenly replaced Iran as Turkey's chief export market. However, the main Turkish export to the UAE was gold -- $1.9 billion worth in August alone. Dubai has traditionally been the world's most important economic gateway to Iran." http://www.asapvasa.com/site/News/newsdetail/639
If I read the site correctly, the US Mint produced 703,500 ozt. in Gold in 2012. Is that a trifle? In 2012, Iran will have imported from Turkey alone (or Turkey via UAE) 8,573,141 ozt of Pure Au. Do you realize HOW MUCH GOLD that is? Iran has imported ~12x MORE GOLD in this year than the US Mint produced. In one year, the Gold that Itan imported from Turkey is more than ALL THE US MINT's GOLD PRODUCT since 1999 (7,953,000 ozt.) And that's from ONE country (perhaps unaccounted for, several other conduits) to say nothing of any Swiss bullion Iran imported... in total, 2x, 3x more??? And the bullionists here believe this has had NO EFFECT on POG? Really?! Hmmm. o.k.
The Mint doesn't produce gold. The Mint turns gold into coinage. The Mint's coinage production figures tell us nothing about U.S. gold production. In fact, U.S. gold production from mines has been running well over 200 metric tons per year lately, with production from scrap recycling contributing nearly as much again. In 2011 the U.S. exported 470 metric tons of gold, which works out to about 15.1 million ozt. So Iran's imports are about half of the U.S.'s exports. Non-negligible, but not nearly so huge as you're making them sound. For another comparison, the U.S. Treasury has a gold stock of about 260 million ozt. So Iran would have to keep importing gold at the quoted rate for about three decades if they wanted to accumulate as much as we've got. In other words, the numbers you're quoting aren't remarkable, for an entire country. They don't reflect some kind of massive distortion of the gold market; they just reflect a country that feels like increasing its gold reserve a bit.
Well, you have a point - not well elaborated, but still. In this context, the US Mint only produces Gold PRODUCT - of course it's not refining ore anymore. Like Iran, the US Mint has bought bullion/planchets from foreign sources in recent years; I'm not convinced the Gold is necessarily "all-American Gold" either. Gold Corp. of Australia is reported/reputed to be the sole supplier of .9999 gold planchets for the American Gold Buffalo bullion and the First Spouse coin programs: http://www.mineweb.co.za/mineweb/co...tical-economy?oid=108615&sn=Detail&pid=102055 Other reports declare the Sunshine Minting of Coeur d’Alene, Idaho "the one & only supplier" of AGE planchets. Very oddly, however, their website only mentions Silver (not the exclusive product): "We are the primary supplier of silver blanks to the United States Mint..." ? The US Mint reportedly spent $3.75 bln for contract PMs in FY 2011; only 1/3rd went to Sunshine Minting ($1.25 Bln) for ALL ASEs and AGEs. http://www.bullionstreet.com/news/us-mint-buys-more-goldsilver-from-sunshine/348 In 2011, the US Mint must have been producing coin with stockpiles and/or foreign sources. In 2011 the US Mint produced (American Eagle 1oz coins) 910,000 ozt; @ 1,488 (avg Monthly Spot, FY 2011, London Spot) that's an expense of $1.354 Bln right there! Where can someone see where Sunshine Minting sources it's Gold? Or what percentage of ASE were from Sunshine Ag planchets? If Solyndra ($550 mln contract) was such a "big deal" why no transparency with the "US Gold" racket? (Not that I personally care where the Gold comes from - just that we shouldn't lie about it.) I suspect the US source reg has been dodged, by the numbers. It's well-known the USA exported Gold-scrap to Turkey and imported refined ingot. One example, little Rhode Island currently exports ~ $50-$100 million in Gold to Turkey each year: http://www.census.gov/foreign-trade/statistics/state/data/ri.html How ironic: your granny's 'junk Gold' sold @ $0.40 on the $1. >> Cash4Gold scammers, @ melt >> Turkish Gold refineries @ mkt? >> Islamic Republic of Iran! Once upon a time, '60 Minutes' and other investogative journalists would track this sort of circuitous trade. Now? Meh, it's too complicated and piffle compared to other grifts. The US Senate obviously doesn't aggree. As for doubting it's 'huge numbers' - well, again: it's 12x the US Mint's Gold Product! Yet you insist that amount of Gold is a trifle, '8 million ounces is just >8 million ounces' ... no big deal! By this 'logic', likewise, had US Mint NOT minted 7,953,000 ozt over the last 12 years the global bullion market wouldn't have moved/cared either. Is US retail supply/demand really superfluous, irrelevant to POG? The bald & confident assertion it has NO EFFECT whatsover is, I think, highly suspect. Certainly, US bullionists would have flipped out! And - I'll predict, here - when US retail is finally denied access to US Gold coin then POG priced in USD$ will go parabolic. I can't say what effect US retail demand has on POG, but I doubt it's nil. And surging bullion demand from an oil-rich nation prepared to go to war with the USA/Israel over nukes? LOL That's nothing to ignore, either.
Late March 2013 articles: http://goldinvestingnews.com/23494/iran-bullish-for-gold-european-union-sanctions-currency-fluctuation.html http://www.jpost.com/Iranian-Threat/News/US-urges-EU-to-overcome-Iran-sanctions-appeals-307700
Fundamentally this may bode well for the POG, but as long as there is a London price fix it won't matter much.
