So, why will the U.S. gold market suffer a deficit if gold demand is down sharply this year? Well, it seems as if the culprit is the huge increase in net gold exports. Last year, the U.S. imported 374 metric tons (mt) of gold and exported 398 mt for a net 24 mt deficit. However, this year, estimates for U.S. gold imports will fall to 250 mt while exports increase to 475 mt. Thus, the U.S. net export deficit will be 225 mt in 2017:
However, if we look at all the data in the chart above, the U.S. gold market will experience a net 76 mt deficit in 2017 versus a 44 mt surplus last year (bars right-hand side of chart). Again, we can see that U.S. gold imports are estimated to decline significantly this year to 250 mt compared to 374 mt in 2016. Furthermore, total U.S. gold exports are forecasted to increase to 475 mt this year versus 398 mt in 2016.
When we factor in U.S. gold mine supply, domestic consumption, and gold scrap supply, the market will go from a small 44 mt surplus in 2016 to a 76 net deficit this year.
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