Chinese vs. United States Gold Demand
The amount of gold delivered on the Shanghai Gold Exchange is staggering, especially when compared to sales of American Gold Eagle coins, the world’s largest selling gold coin.
Shanghai Gold Exchange Physical Gold Deliveries vs. Sales of American Gold Eagle Coins
Sales of American Gold Eagle coins have declined in recent years. (see chart) American Gold Eagle coin sales peaked in 1999 and as we noted in “The Importance of Gold to Individuals and Nations” while gold is increasingly important to nations and individuals in the east, it is not highly regarded generally in the west by governments, central banks or individuals.
As such, we have noted the trend of gold moving from west to east.
The demand for gold in the east is increasing while demand in the west lags as this chart illustrates:
Gold Demand By Country and Region 1985-2014
About 80% of gold demand in 2014 came from the Middle East, the Far East, Japan, Russia, India and China.
United States Mint American Gold Eagle Coin Sales vs. Gold Deliveries on the Shanghai Gold Exchange
The United States Mint began producing American Gold Eagle coins in 1986. The Shanghai Gold Exchange opened in 2009 with the goal of becoming a major eastern hub for the trading of physical precious metals.
In January 2015, the United States Mint sold 51,500 one ounce American Gold Eagle coins, or just 1.64 tons worth of gold*.
In the first three weeks of January 2015, the Shanghai Gold Exchange has delivered 201 tons of gold.
American Gold Eagles sold in January 2015 vs. Gold Delivered on the Shanghai Gold Exchange in the First Three Weeks of 2015
January American Gold Eagle coin sales are dwarfed in comparison to January Shanghai Gold Exchange deliveries.
Here’s a comparison of all one ounce American Gold Eagle coins sold in 2014 vs. the amount of gold delivered in the first three weeks of 2015 at the Shanghai Gold Exchange.
American Gold Eagles Sold in 2014 vs. Gold Delivered on the Shanghai Gold Exchange in the First Three Weeks of 2015
American Gold Eagle coin sales in 2014 amount to a small fraction of gold delivered on the Shanghai Gold Exchange in the first three weeks of January 2015.
Take all the American Gold Eagle coins ever sold in all the Januaries since 1987 and you still don’t come close to the amount of gold that was delivered in the first three weeks of 2015 at the Shanghai Gold Exchange!
American Gold Eagles Sold In All Januaries 1987-2015 vs. Gold Delivered on the Shanghai Gold Exchange in the First Three Weeks of 2015
Sales of American Gold Eagle coins in all Januaries from 1987-2015 still amount to less gold than delivered on the Shanghai Gold Exchange in the first three weeks of January 2015.
The United States Mint’s entire output of American Gold Eagles sold from 1986-2014 compared to the amount of gold delivered on the Shanghai Gold Exchange in the first three weeks of 2015, is a comparison in which the U.S. Mint comes out more favorably.
American Gold Eagle Coins Sold 1986-2014 vs. Gold Delivered on the Shanghai Gold Exchange in the First Three Weeks of 2015
Sales of American Gold Eagle coins from 1986-2014 amount to more gold sold than was delivered on the Shanghai Gold Exchange in the first three weeks of 2015.
The above example is an unfair comparison. Take, instead the entire amount of American Gold Eagle coins produced by the U.S. Mint from 1986-2014 and compare it to just one year of gold deliveries on the Shanghai Gold Exchange:
American Gold Eagles Sold 1986-2014 vs. Gold Delivered on the Shanghai Gold Exchange in 2014
Sales of American Gold Eagle coins from 1986-2014 are significantly lower than just one year of gold deliveries on the Shanghai Gold Exchange.
Here is the most recent chart by Nick Laird of Sharelynx showing the volume of gold (70.624 tons) delivered on the Shanghai Gold Exchange for the week ended January 23, 2015:
The Shanghai Gold Exchange 2009-2015 Gold Withdrawals
The Shanghai Gold Exchange has delivered over 8,000 tons of gold since 2009.
*the assumption is that American Gold Eagle coins are primarily sold to American citizens, which may not be the case.
Note: Other sources put the amount of gold delivered on the Shanghai Gold Exchange in 2014 at closer to 1,850 tons rather than 2,016 tons.
Last month we compared “record” silver demand for American Silver Eagle coins in 2014 to the annual global silver mining production. We saw that the U.S. Mint’s sale of 44 million American Silver Eagle coins in 2014, while impressive, was only a single digit percentage of annual global silver mining production.
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Further Reading:
Gold and Silver Price Manipulation – Suspected
Gold and Silver Price Manipulation – Actual
Gold Reserves by Country – Top Twenty
Gold Moves West to East Part 1
Gold Moves West to East Part 2
U.S. Mint silver and gold eagle coin sales in January 2015
U.S. silver coin demand a historical perspective
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