Why Has $1 Billion in Gold been Shipped from New York to South Africa?

Why Has $1 Billion in Gold been Shipped from New York to South Africa? (Liberty Blitzkrieg, May 14, 2013):

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.

Full article here.

In Liberty,

1 thought on “Why Has $1 Billion in Gold been Shipped from New York to South Africa?”

  1. There are too many stories out there on the subject of gold. Germany demanding half of what they have stored here at the FED, and it will take a long time to ship it all to Germany. Why?
    Germany made the same request of France, again, it will take a long time for all of it be shipped. Why?
    Some gold bars have lead in their center…Why?
    A huge supply of gold discovered in Iraq in 2003, suddenly story went cold. Nothing was ever said about the gold, where was it and who has it?
    If the entire world supply of gold would fit in two Olympic sized swimming pools, why will it take years to ship to the German government?
    This is very confusing. There are far more questions than answers. Where is the gold? How much do we really have? Who sets the value?
    Very strange. Thanks for the articles on this subject.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.