Is The South African Mint Short Of Gold?

Tyler Durden's picture

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

In what may be the strangest story I have seen in a while related to the gold market, it appears $982 million worth of gold has left JFK international airport in New York to some undisclosed location in South Africa.  While it remains unclear what purpose this gold serves, it seems the most likely explanation is to fulfill demand for Krugerrands (South Africa’s popular gold bullion coin) to meet elevated demand in the face of constricted mine production.  This story is timely coming on the heels of the article I posted yesterday about how Dubai’s gold demand is running at 10x normal levels.  This is a bizarre story, so if anyone has further color I’d love to hear it.

From Quartz:

Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March.

 

Why?

 

It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)

 

The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.

 

However, the strikes that rocked South Africa’s mining industry last year briefly caused gold output to fall sharply, around the same time as last autumn’s big gold shipment from JFK. Overall 2012 production declined by a relatively modest 6% (pdf) over the year before, according to a preliminary figure from the US Geological Survey; but those first estimates have sometimes proven wide of the mark. (In 2009 the USGS estimated South Africa’s 2008 production to be 250 tons; it subsequently revised the figure to 213 tons.) So it could be that the strikes dealt a more severe blow to the country’s gold industry than the data show.

 

Still, even if gold output did fall precipitously, it’s not clear why South Africa would need to start importing it. One possible destination for the gold is the South African Mint, which produces legal-to-own gold coins called Krugerrands; the gold used in them is first refined by the Rand refinery. Calls to the South African embassy in Washington, DC were not returned.

Meanwhile how about this chart, courtesy of the Quartz article.

GoldfromJFK

 

Full article here.

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Real Estate Geek's picture

VAT? DAT'S DEUTCHLAND'S GOLD!

SCHULTZ !!!!!!!!!

ACP's picture

Running out of gold to make those Krugmans...

My bad, Krugmans are made of paper.

SafelyGraze's picture

we call it "above ground mining"

it's easy

just pay a guy to walk on the sidewalk and spin a big yellow "we buy gold!" sign

that's how we mine it from above ground

mining the below-ground metal takes a lot more people and machines and effort and stuff, which is crazy hard to do

hugs,
tptb 

Chaffinch's picture

Another 22,000 ounces left the JPM vault yesterday.

Total Comex down below 8m ounces again ; )

fonzannoon's picture

I imagine that if the big money up top was really in the process of a true run on the physical market, it would have gotten to the point of panic already. Unless people are fine settling in cash.

(I did not down arrow u)

Chaffinch's picture

+1 Fonz.

They should be panicking but I agree Big Money is not there yet. When it happens I think it will be so quick we might miss it!

I guess the down arrow is because I am slightly off topic!

fonzannoon's picture

These stories are entertaining and all...they just don't seem to add up. Kyle Bass famously said if only 4% of people ask comex for delivery "price will solve everything".

We keep reading about unprecedented demand in Asia, Australia, China, Japan, Canada, the U.K etc etc etc...

Yet 4 out of 100 rich bastards still have not knocked on the window and asked if they could see their shiny metal?

and I can pretty much buy gold anywhere right now?

 

oddjob's picture

Asians have been buying Gold for thousands of years, I suppose you forgot to read that part. Its nice you made  Japan and China seperate from Asia. It seems hyperbole is your game too.

fonzannoon's picture

I am trying to do two things at once, sorry about the asia comment.

So your prediction is no comex default for at least a few more thousand years. I guess you confirmed my thoughts, thanks.

 

Pinto Currency's picture

 

 

Are there any gold refineries is S.Africa?

Could be coin melt bars going to S.Africa for refining then on to the final destination.

Oracle of Kypseli's picture

Agreed. Nothing is what it seems. S. Africa is most likely just the first stop.

oddjob's picture

Never posted word one about a Comex default, never.

fonzannoon's picture

I did, dumbass. You pointed out a mistake I made, which is cool. But if that is all you have to offer you seem to be the type that just trolls around here looking for spelling mistakes. Unless you actually have something worthwhile to add....

oddjob's picture

Why such concern for such a small asset class?

<crickets>...yes I did edit that becuase you have no plausible answer.

fonzannoon's picture

I stopped wasting my time with you when you made the incorrect assumption that I upvoted myself. It showed a lot about you and how you think. I have no further interest in your thoughts. Go troll someone else.

oddjob's picture

one day I hope to own a fleet of trollers like you.

fonzannoon's picture

Really? What happened to make due with less? Move to a rural place etc?

You are a fucking mess. Pull yourself together.

oddjob's picture

says the guy that cant leave just one fucking thread on ZH without leaving some worthless comment on it. Get a Life.

oddjob's picture

You are the one repeatedly refering too Bass, as far as I am concerned he is a primped up maggot in a suit.

fonzannoon's picture

wow...interesting. I don't even know that I disagree with you about Bass. The jury is still out for me.

 I did not see this coming. Let me try this from a different angle.

Do you think he is correct in his views about the comex, and do you have any of your own? You have my undivided attention. No joke.

 

oddjob's picture

I dont give a shit about the Comex. Pay off debt. Consume as little as possible. Place savings in PM's when possible. Move to a rural enviorment. Life a simple life.

greatbeard's picture

I've done all that.  Now what?

oddjob's picture

Consider yourself in the top 1%, be very thankful that you had the foresight and ambition to put yourself in the place you are.

Urban Redneck's picture

4% is not the same as |4|

do some simple math on what 4% of outstanding paper gold contract volume at the Comex amounts to and compare that to current Comex inventories and those at the time Bass made the comment

fonzannoon's picture

Keep editing your post oddjob to maxamize your jab, since you can't actually address my point.

 

oddjob's picture

and keep upvoting yourself and we will all be fine then.

fonzannoon's picture

watch me upvote myself now so you can see I was not upvoting myself before.

Nevermind my question. Since you assumed I upvoted myself earlier, and were wrong, I guess that's just how you roll.

CCanuck's picture

Hey Fonz,

The last rich bastards knocking on the window, got Corzine'd. I would have to think that the players left in the game are taking cash+prem. Then taking cash and buying physical anywhere, probably getting 105-110oz worth after cash settlement, why would you want that to stop??? I would'nt if was a playa, but I am just some Crazy Canuck who knows shit about shit.

Ccanuck

fonzannoon's picture

" I would have to think that the players left in the game are taking cash+prem Then taking cash and buying physical anywhere"

Now that makes a ton of sense. It just seems like that would be showing up elsewhere.

I bring it back to Cyprus. The rich russians found a way to get their money out. The little Cypriot got screwed. I am the little guy. How come I can buy gold pretty much anywhere right now? You would think I would be frozen out while the big money finds a way, no?

CCanuck's picture

Again, I am just a crazy canuck, but I work part-time at a local coin shop, get some insight into flows and demand.

You can still find it beacuse the little guys are rationed (US & CAN Mints) just enough (peaked at 4-6weeks delivery) to meet demand for coin investors, plus turning over sold coin collections(scrap) and small investor bullion (maples,ASE,Koalas) directly back to the small investor via LCS, helps keep the demand in check for the big guys to rip phys from the GLD and JPM, all the while making PM look like shite to any noobie stackers. I believe its MOPE that has stopped the Western little guys outta the pool, they think the pool is full of sharks and are scared of moving savings out of fiat and into real money.

You will know when your frozen out, it will get real cold, real fast after the last bit of physical has been taken from the bullion banks, or comex.

Ccanuck

fonzannoon's picture

CCanuck, I sincerely thank you for your insight. awesome man. Much appreciated.

fasTTcar's picture

Because it is costing over 5% premium to buy physical in large quantities.

auric1234's picture

Watching under your car for the rest of your life is even more costly.

 

BaBaBouy's picture

USA Is Being Ransacked For Real Hard Assets, While Loading Up On Fiat Papers And Exotic Leverage.

 

This Financial Shit Will Not End Well...

 

Go BEN Shalom Goooooooo ...

fomcy's picture

F*cking cocksuckers cut my wealth in half already Silver tanking. $23 so far

50% from the top and it's happenning while every bankster around the world is printing

f*cking money!!! F* Fraud!

Bobbyrib's picture

When "Big Money" wants gold, it will be confiscation time. Right now it's time to go boating.

DeadFred's picture

My theory is this story is about a decades old confiscation. Roosevelt took the American's gold, melted it down and stuffed it in vaults. Was it ever refined? Perhaps not. They're nearly out of gold for delivery but can't use the available unwrought gold. South Africa has surplus refining capacity and can turn the Roosevelt's gold around to make it deliverable. Bet the gold make the round trip, not as K's but as deliverable bars. End game activity.

Buck Johnson's picture

It's a two tier settlement I bet.  The big boys are told they will get gold and receive it but the smaller ones are told they will settle in cash.  There is a run happening and always remember, a run is done first quietly by the elite.  Once done then they yell fire and everybody sees that there isn't enough for everybody and the fighting begins.

seek's picture

And eligible is going to break below 6M pretty soon, too.

Sure looks like the South African gold came from JPM's registered pool to me.

Ted K's picture

Damn man, you SURE???? I thought Eric Sprott pooped the gold bars out of his butt while TylerDurden stood underneath with palms open with a sheepish grin and pigtails in a type of Sprott fetish.

Fuku Ben's picture

I think some of those UT physical gold holdings he recommended they take possession of have left the country

http://www.bloomberg.com/news/2013-04-24/texas-university-fund-sold-375-million-in-gold-bar-holdings.html

SHEEPFUKKER's picture

This is awesome, send gold to gold producing country. Makes sense. 

Rustysilver's picture

Sheepfukker,

Yes, this is new "normal". Up is down, down is......

espirit's picture

Now you see it, now you don't.

markettime's picture

Doesn't China own a bunch of stuff in South Africa? Maybe that is where all of the relics are going....