The US Gold Market: Completely Insane

April 19, 2015
Independent Researcher & Precious Metal Analyst

When it comes to investing in gold, for the most part, the U.S. Gold Market is completely insane.  I am not blaming Americans, as they have been totally brainwashed by the U.S. Treasury and Federal Reserve into believing that gold is something you wear, not invest in.

This is certainly proven by the data shown in the chart below.  These figures come from the World Gold Council Full Year Demand Trends Reports, and while it may be true that the data is manipulated or incomplete, it’s the best we can go by.  And I believe it gives us a pretty good idea of the insanity taking place in the good ole US of A.

From 1999 to 2007, Americans purchased a staggering 3,196 metric tons (mt) of gold jewelry for adornment purposes.  That translates to an amazing 103 million ounces (Moz).  The reason Americans purchased so much gold jewelry during this nine-year period was due to the low price of gold (especially 1999-2005):

gold jewelry and retail investment

During this same time period, Americans purchased 231 mt of gold for investment.  This turns out to be a whopping 7.4 Moz.  As the chart above shows, gold investment was a lousy 7% of the pie, whereas gold jewelry stole the show by consuming 93% of these two markets.

If we look at the next bar in the middle of the chart (2008-2014), we can see a distinct change in American gold buying habits.  First, as the price of gold skyrocketed, less Americans could afford to purchase gold jewelry for adornment bragging rights.  Secondly, more Americans were starting to buy gold as an investment due to the near collapse of the U.S. financial system in 2008.

From 2008 to 2014, gold jewelry demand fell considerably to 992 mt, while gold investment more than doubled to 545 mt.  Thus, retail gold investment over this eight-year time period was 35% of these two markets, while jewelry declined to 65%.  In 2010, retail gold investment peaked at 45% of the total as jewelry fell to 55%.

Even though retail gold investment picked up in the United States after 2007, the total since 1999 was 776 mt compared to 4,188 mt of gold jewelry purchases.  Again, this translates to 25 Moz of retail gold investment versus 135 Moz of gold jewelry for adornment purposes.

Now, I say adornment because as the financial situation became rough for Americans after 2007, the market experienced a huge increase in the”Scrap Gold for Money” market.  Americans no longer enjoyed the bragging rights to wear gold, instead they pawned Billions of Dollars worth of scrap gold over the next several years.  Do you think the folks in India pawned off their gold jewelry when prices declined… LOL.

Before I end this short article with the last TIDBIT that really proves the point that the U.S. Gold Market is completely insane… I want to explain why I have cut back on publishing articles on the site recently.

I am working on my actual first soon to be published PAID REPORT on the Silver Market.  I mentioned before that I had planned to publish a U.S. GOLD MARKET REPORT, which the chart in this article was a part of, but did not do so because the information I received from the USGS on NY Fed gold withdrawals was incorrect.  I am not going to get into the details, but just to say the main assumption of the report was no longer valid.  I had planned to rewrite the report because there is a lot of valuable and interesting information, but I decided to start working on some PAID SILVER REPORTS instead.

I plan on publishing three paid reports on the Silver Industry and Market.  This is where a great deal of my time is being sucked into.  However, I believe my followers, readers and new guests to the site will find the data and information in these reports well worth the money and time to read.

I plan on publishing the first report next month as the report is currently two-thirds written.  I will update the status of the publication date as I complete the report.

Okay…let’s get back to the lunacy of the U.S. Gold Market.  As I mentioned, Americans were buying more gold as an investment after the collapse of the U.S. Investment Banking Market in 2008 and less gold jewelry as the price skyrocketed.  However, something changed in 2014.

As the rest of the world (mainly China, Asia & India) took advantage of bottom basement gold prices in 2014 by adding gold to their investment stash, what did Americans do?  LOL…. you got it.  Americans increased their gold jewelry buying once again, to a hefty 179 mt.  The last year Americans purchased more was in 2008 at 188 mt. 

And of course, if Americans are going to take advantage of low gold prices to purchase more gold jewelry, why then it makes perfect sense for U.S. citizens to also cut back on investing in that yellow barbarous relic.  Which they did.  In 2014, Americans bought a pathetic 47 mt of retail gold investment, down from 67 mt in 2013.

Finally, the United States is heading for serious trouble.  Because we have the world’s best printing press, we have been able to postpone the inevitable for a while.  Unfortunately, there is way too much INSANITY taking place in every aspect of our society, economy and financial system that the TRUTH will not set us FREE, but rather cause the greatest collapse the world has ever seen.

I really don’t know how events are going to unfold when we finally HEAD OVER THE CLIFF, but I know enough to purchase gold as an investment rather than highly marked-up gold jewelry so I look better buying that $5 cup of coffee at Starbucks.


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Steve St. Angelo

Independent researcher Steve St. Angelo (SRSrocco) started to invest in precious metals in 2002.  Later on in 2008, he began researching areas of the gold and silver market that, curiously, the majority of the precious metal analyst community have left unexplored.  These areas include how energy and the falling EROI – Energy Returned On Invested – stand to impact the mining industry, precious metals, paper assets, and the overall economy. He has written scholarly articles in some of the top precious metals and financial websites. Visit his website SRSrocco Report.

Gold is using for heat dissipation in some cars.

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