Americans are buying too much gold

[deborah]

I live in Australia. We have been hoping to avoid the tariffs that are being inflicted on any country that has a positive trade balance with the US. We have always had a negative one (we import more than we export to the US) ever since this data started to be collected in 1988.

HOWEVER

In December and January, we have a positive trade balance because somehow people in the US are buying up gold. As we export gold, they've been buying up OUR gold (a 92 fold increase since November). So in the only quarter that counts we have a positive trade balance.

https://www.theage.com.au/politics/federal/australia-had-one-trump-card-to-shield-it-from-the-tariffs-war-it-just-disappeared-20250311-p5lip8.html

Why has this happened?

[flyingsnakes]

I can't read the article, but are you saying that Australia has exported 92 times the amount of gold to the US in January than it did in November? That seems a bit hard to imagine.. care to add more details from the article for people that don't subscribe?

[seattlecyclone]

People (in America at least) tend to stock up on precious metals as a hedge against economic and/or political instability. We're kind of experiencing both at the moment.

[deborah]

I can't read the article, but are you saying that Australia has exported 92 times the amount of gold to the US in January than it did in November? That seems a bit hard to imagine.. care to add more details from the article for people that don't subscribe?

I included the link to the article as there are some people here who only like facts that have a source. The article states that the Australian government entity that collects information about our exports and imports has released them for January, and there was 92 times the value of gold exported to the US than there was before December, tipping our trade balance.

American imports of gold have soared since the start of the year. The average monthly value in 2022 and 2023 was about $US1.7 billion. In January, it soared to $US30.8 billion.

[Heckler]

Aren't there gold mines all over the US?  Should bring those jobs home!

It seems America is reliant on imports...

[flyingsnakes]

Interesting. It seems that the time to buy Australian gold mining companies' stock has passed though, as many have nearly doubled this year https://www.miningfeeds.com/gold-mining-report-australia/

[SilentC]

I can’t see the article, but I have read others about American investors with gold stored in other countries, namely in UK for access to the metals exchange, have moved it rapidly to the US in case Trump will create a (edit - metals) tariff.  A few analysts I follow have said that retail flows have picked up but they are still fairly limited and central bank buying has been driving prices up.  If anyone wants to share good data on either I would appreciate it.

[SilentC]

Interesting. It seems that the time to buy Australian gold mining companies' stock has passed though, as many have nearly doubled this year https://www.miningfeeds.com/gold-mining-report-australia/

The miners look somewhat interesting to me still, I know some disagree but they are not baking in $2,900 gold into NPV yet as a whole.  I figure the US disrupting global trade and de facto abandoning NATO could lead to a shake up in monetary regime though I have mostly been hedging that with FX diversity, not gold. 

[Kapyarn]

I have Canadian gold (1oz gold maples).  Go Canada!

Fun to hold, were not really a great investment until recently (paid $1100 each, now they are worth about $3000).

I do feel kind of bad that I am one of these gold hoarding Americans though...

[MustacheAndaHalf]

"Australia shipped a record amount of gold to the US in January – worth US$2.9bn – according to Australian Bureau of Statistics figures, the highest figure in records dating back to 1995. Investors in the US, fearful of the impact of an uncertain and potentially punitive tariff regime, have taken refuge in the safe-haven asset, driving prices to new records last month."
https://www.theguardian.com/australia-news/2025/mar/12/australias-record-gold-exports-to-us-set-back-its-case-for-tariff-relief-as-trump-trade-war-looms

Here's the report released by the Australian government.  The overall statistics just show that gold export was up ($3.0B to $5.4B from Dec to Jan), but not a breakdown by countries.  I imagine the spreadsheets hold that information, but I didn't dig in.
https://www.abs.gov.au/statistics/economy/international-trade/international-trade-goods/jan-2025#supplementary-information

[MustacheAndaHalf]

American imports of gold have soared since the start of the year. The average monthly value in 2022 and 2023 was about $US1.7 billion. In January, it soared to $US30.8 billion.

The Australian government figures say $2.9 billion of gold was purchased by Americans in January.

I think they might be playing games with the numbers: Australia did not export $30 billion in gold this year.  They say "average monthly value", suggesting they are taking a short time frame and extrapolating to an entire year.  They are assuming Americans panicking over trade tariffs will last for all of 2025.  It is very unlikely a sudden spike will last a whole year.

[deborah]

There’s no problem with the spike lasting. The problem is that the spike is at exactly the time that your president is checking figures to determine how much in the way of tariffs he’s imposing on each country. Because we’re suddenly importing less from the USA than we’re exporting to you (which hasn’t happened before), we’ll get enormous tariffs.

[Must_ache]

If your country was running up debt, you would do well to hold gold in your portfolio too.

[ChpBstrd]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

Also, there is BRICS Pay looming out there which could go live at any minute and negate the point of the world's reserve currency?

Finally, U.S. Republicans have free reign to enact a tax cut bill that will expand the deficit by trillions of dollars. Hopefully the bond market doesn't snap! We'll see!

There are plenty of reasons for American investors to buy all the gold they can get. The question is whether Australians are getting screwed, trading their perfectly good gold for this soon-to-depreciate currency.

[GuitarStv]

If your country was running up debt, you would do well to hold gold in your portfolio too.

Well, that's silly.  DOGE is ensuring that there won't be any government waste to run up debt.

[MustacheAndaHalf]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

The White House claims the stockpile will be "capitalized" using "forfeited" crypto currencies.  Essentially, crypto the FBI seized but hasn't auctioned off yet.

The Secretary of the Treasury shall establish an office to administer and maintain control of custodial accounts collectively known as the “United States Digital Asset Stockpile,” capitalized with all digital assets owned by the Department of the Treasury, other than BTC, that were finally forfeited as part of criminal or civil asset forfeiture proceedings ...

https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/

[ChpBstrd]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

The White House claims the stockpile will be "capitalized" using "forfeited" crypto currencies.  Essentially, crypto the FBI seized but hasn't auctioned off yet.

The Secretary of the Treasury shall establish an office to administer and maintain control of custodial accounts collectively known as the “United States Digital Asset Stockpile,” capitalized with all digital assets owned by the Department of the Treasury, other than BTC, that were finally forfeited as part of criminal or civil asset forfeiture proceedings ...

https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/

It's the same net effect as if the government auctioned the forfeited cryptocurrencies and then borrowed money to purchase more.

The more troubling trend is governments accepting tax payments in crypto. Colorado and Idaho appear to accept tax payments in crypto, and Louisiana is allowing it for fines. It's not hard to imagine taxpayers being offered the ability to pay their federal taxes in crypto, at a time when the U.S. is running massive deficits and borrowing by the trillions. Again, no net difference in a government doing this or simply taking loans to buy crypto.

[GuitarStv]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

The White House claims the stockpile will be "capitalized" using "forfeited" crypto currencies.  Essentially, crypto the FBI seized but hasn't auctioned off yet.

The Secretary of the Treasury shall establish an office to administer and maintain control of custodial accounts collectively known as the “United States Digital Asset Stockpile,” capitalized with all digital assets owned by the Department of the Treasury, other than BTC, that were finally forfeited as part of criminal or civil asset forfeiture proceedings ...

https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/

It's the same net effect as if the government auctioned the forfeited cryptocurrencies and then borrowed money to purchase more.

The more troubling trend is governments accepting tax payments in crypto. Colorado and Idaho appear to accept tax payments in crypto, and Louisiana is allowing it for fines. It's not hard to imagine taxpayers being offered the ability to pay their federal taxes in crypto, at a time when the U.S. is running massive deficits and borrowing by the trillions. Again, no net difference in a government doing this or simply taking loans to buy crypto.

Yeah, I've been wondering why Republicans are so anti-US dollar.  I guess it's because they know that the policies they're following will tank the dollar and crypto offers a safe haven for personal wealth.

[ChpBstrd]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

The White House claims the stockpile will be "capitalized" using "forfeited" crypto currencies.  Essentially, crypto the FBI seized but hasn't auctioned off yet.

The Secretary of the Treasury shall establish an office to administer and maintain control of custodial accounts collectively known as the “United States Digital Asset Stockpile,” capitalized with all digital assets owned by the Department of the Treasury, other than BTC, that were finally forfeited as part of criminal or civil asset forfeiture proceedings ...

https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/

It's the same net effect as if the government auctioned the forfeited cryptocurrencies and then borrowed money to purchase more.

The more troubling trend is governments accepting tax payments in crypto. Colorado and Idaho appear to accept tax payments in crypto, and Louisiana is allowing it for fines. It's not hard to imagine taxpayers being offered the ability to pay their federal taxes in crypto, at a time when the U.S. is running massive deficits and borrowing by the trillions. Again, no net difference in a government doing this or simply taking loans to buy crypto.

Yeah, I've been wondering why Republicans are so anti-US dollar.  I guess it's because they know that the policies they're following will tank the dollar and crypto offers a safe haven for personal wealth.

So far the cryptos have been mere pump-and-dump scams or bribery pipelines (Trump coin, Melania coin, Dogecoin) but they could eventually become a way for the wealthy to escape taxes and the US national debt. If we all switched to crypto, we could let the dollar fall to nothing and erase the US's national debt and some mortgages too! But that isn't yet feasible.

For now, a falling dollar is good for them because they're leveraged to the tits. Trump has mortgages on all his real estate. Musk has essentially mortgaged his TSLA shares. CEOs with compensation tied to specific stock prices benefit from inflation because their companies can raise prices, earn more, and be worth a multiple of their higher nominal earnings.

[SilentC]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

The White House claims the stockpile will be "capitalized" using "forfeited" crypto currencies.  Essentially, crypto the FBI seized but hasn't auctioned off yet.

The Secretary of the Treasury shall establish an office to administer and maintain control of custodial accounts collectively known as the “United States Digital Asset Stockpile,” capitalized with all digital assets owned by the Department of the Treasury, other than BTC, that were finally forfeited as part of criminal or civil asset forfeiture proceedings ...

https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/

It's the same net effect as if the government auctioned the forfeited cryptocurrencies and then borrowed money to purchase more.

The more troubling trend is governments accepting tax payments in crypto. Colorado and Idaho appear to accept tax payments in crypto, and Louisiana is allowing it for fines. It's not hard to imagine taxpayers being offered the ability to pay their federal taxes in crypto, at a time when the U.S. is running massive deficits and borrowing by the trillions. Again, no net difference in a government doing this or simply taking loans to buy crypto.

Yeah, I've been wondering why Republicans are so anti-US dollar.  I guess it's because they know that the policies they're following will tank the dollar and crypto offers a safe haven for personal wealth.

They (edit - current politicians in power, not all Republicans) are so pro crypto because it makes graft easier. It’s why it’s promoted in some authoritarian regimes.  I’m open to the idea of tax and fine collection in crypto, it theoretically encourages sketchy businesses and criminals who do business primarily in crypto to pay taxes at least and might trap a few tax cheats (like if someone pays taxes in crypto and never reported cap gains related to crypto trading).

Thanks for the AU page link @MustacheAndaHalf.

[erjkism]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

Also, there is BRICS Pay looming out there which could go live at any minute and negate the point of the world's reserve currency?

Finally, U.S. Republicans have free reign to enact a tax cut bill that will expand the deficit by trillions of dollars. Hopefully the bond market doesn't snap! We'll see!

There are plenty of reasons for American investors to buy all the gold they can get. The question is whether Australians are getting screwed, trading their perfectly good gold for this soon-to-depreciate currency.

I'm curious, how are you prepping for a potential mass-devaluation of the USD?

[Must_ache]

Embrace it?

[less4success]

[Changing policies to retain seized crypto is] the same net effect as if the government auctioned the forfeited cryptocurrencies and then borrowed money to purchase more.

Ugh, why did you have to be right about this?

[MustacheAndaHalf]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

The White House claims the stockpile will be "capitalized" using "forfeited" crypto currencies.  Essentially, crypto the FBI seized but hasn't auctioned off yet.

The Secretary of the Treasury shall establish an office to administer and maintain control of custodial accounts collectively known as the “United States Digital Asset Stockpile,” capitalized with all digital assets owned by the Department of the Treasury, other than BTC, that were finally forfeited as part of criminal or civil asset forfeiture proceedings ...

https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserveand-united-states-digital-asset-stockpile/

It's the same net effect as if the government auctioned the forfeited cryptocurrencies and then borrowed money to purchase more.

I viewed this as good news, that crypto markets won't benefit from government buying.  The government will just keep crypto it already holds.

I see, I didn't realize you meant all of the government's money is borrowed.  Buying crypto, spending on defense, paying social security claims - all with borrowed money.  I agree crypto fits that same situation.

[vand]

Similar thing is happening with BoE gold reserves - nobody is 100% certain what is going on but the rumour and scuttlebutt is that DJT is going to audit the Fed's gold stock

To be clear, it is not "Americans buying" as much as it is "American buying".  Neither Wall street or Main street has suddenly decided it needs to allocate 10% in gold.

[ChpBstrd]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

Also, there is BRICS Pay looming out there which could go live at any minute and negate the point of the world's reserve currency?

Finally, U.S. Republicans have free reign to enact a tax cut bill that will expand the deficit by trillions of dollars. Hopefully the bond market doesn't snap! We'll see!

There are plenty of reasons for American investors to buy all the gold they can get. The question is whether Australians are getting screwed, trading their perfectly good gold for this soon-to-depreciate currency.

I'm curious, how are you prepping for a potential mass-devaluation of the USD?

I don't have a great answer for that question right now, but I'm working on it.

• I'm now holding my spare change in all accounts in IAU (gold) instead of my old go-to SGOV (treasury bills). So far so good!
• I hedge most of my equity positions (QQQ and IWM) using a collar options strategy. This hedges price losses, but I am still vulnerable to currency losses. So far so good!
• I'm also looking at dollar-bear ETFs like UDN, which I summarized here.
• Longer-term I'm thinking about increasing my international allocation of both equities and bonds, especially to places like Brazil, India, the UK, and Australia. Brazil is my currently most intriguing market due to extreme low valuations. In theory, these companies mostly earn currencies other than dollars, and might be less affected by a USD loss of value.
• In the event of currency controls or increased political instability, I'm looking at foreign brokerage firms, Interactive Brokers, and even the emerging BRICS Pay. Contingency planning needs to work in both the situation where I'm an expat simply living abroad with US retirement accounts OR if I'm a refugee abandoning the US retirement account framework altogether. Lots of tax implications to digest here, from various expat blogs, forums, etc. This would have to co-occur with hedging asset values against a price or currency drop!

  What's really hard to hedge against would be a multi-currency decline. What happens if everyone else starts printing money to protect themselves from the effects of whatever is happening in the US? A diversified set of equities bought at low valuations might be the best long-run answer. Hate to say this, but precious metals funds may also deserve a look.

[Fru-Gal]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

Also, there is BRICS Pay looming out there which could go live at any minute and negate the point of the world's reserve currency?

Finally, U.S. Republicans have free reign to enact a tax cut bill that will expand the deficit by trillions of dollars. Hopefully the bond market doesn't snap! We'll see!

There are plenty of reasons for American investors to buy all the gold they can get. The question is whether Australians are getting screwed, trading their perfectly good gold for this soon-to-depreciate currency.

I'm curious, how are you prepping for a potential mass-devaluation of the USD?

I don't have a great answer for that question right now, but I'm working on it.

• I'm now holding my spare change in all accounts in IAU (gold) instead of my old go-to SGOV (treasury bills). So far so good!
• I hedge most of my equity positions (QQQ and IWM) using a collar options strategy. This hedges price losses, but I am still vulnerable to currency losses. So far so good!
• I'm also looking at dollar-bear ETFs like UDN, which I summarized here.
• Longer-term I'm thinking about increasing my international allocation of both equities and bonds, especially to places like Brazil, India, the UK, and Australia. Brazil is my currently most intriguing market due to extreme low valuations. In theory, these companies mostly earn currencies other than dollars, and might be less affected by a USD loss of value.
• In the event of currency controls or increased political instability, I'm looking at foreign brokerage firms, Interactive Brokers, and even the emerging BRICS Pay. Contingency planning needs to work in both the situation where I'm an expat simply living abroad with US retirement accounts OR if I'm a refugee abandoning the US retirement account framework altogether. Lots of tax implications to digest here, from various expat blogs, forums, etc. This would have to co-occur with hedging asset values against a price or currency drop!

  What's really hard to hedge against would be a multi-currency decline. What happens if everyone else starts printing money to protect themselves from the effects of whatever is happening in the US? A diversified set of equities bought at low valuations might be the best long-run answer. Hate to say this, but precious metals funds may also deserve a look.

I have a large vase filled with pennies. I also covered my kitchen counter with pennies. They will be worth millions in the year 2055.

[yachi]

I moved some funds from BAC, and in a money market to VTIAX.  It's in an IRA, so I don't want to suffer the certain consequences of withdrawing it now (lots of taxes, disqualification from health insurance) to guard against the uncertainty of currency controls or political instability.
I looked at buying physical gold for its portability and protection from a fall in the US dollar, but with it's high price, I haven't done it.
I've thought about keeping some Canadian currency on hand, but not sure how to acquire a significant portion.

[SilentC]

Have you heard about Trump's plan to borrow US dollars to spend on buying up cryptocurrencies and creating a "reserve"?

Also, there is BRICS Pay looming out there which could go live at any minute and negate the point of the world's reserve currency?

Finally, U.S. Republicans have free reign to enact a tax cut bill that will expand the deficit by trillions of dollars. Hopefully the bond market doesn't snap! We'll see!

There are plenty of reasons for American investors to buy all the gold they can get. The question is whether Australians are getting screwed, trading their perfectly good gold for this soon-to-depreciate currency.

I'm curious, how are you prepping for a potential mass-devaluation of the USD?

I don't have a great answer for that question right now, but I'm working on it.

• I'm now holding my spare change in all accounts in IAU (gold) instead of my old go-to SGOV (treasury bills). So far so good!
• I hedge most of my equity positions (QQQ and IWM) using a collar options strategy. This hedges price losses, but I am still vulnerable to currency losses. So far so good!
• I'm also looking at dollar-bear ETFs like UDN, which I summarized here.
• Longer-term I'm thinking about increasing my international allocation of both equities and bonds, especially to places like Brazil, India, the UK, and Australia. Brazil is my currently most intriguing market due to extreme low valuations. In theory, these companies mostly earn currencies other than dollars, and might be less affected by a USD loss of value.
• In the event of currency controls or increased political instability, I'm looking at foreign brokerage firms, Interactive Brokers, and even the emerging BRICS Pay. Contingency planning needs to work in both the situation where I'm an expat simply living abroad with US retirement accounts OR if I'm a refugee abandoning the US retirement account framework altogether. Lots of tax implications to digest here, from various expat blogs, forums, etc. This would have to co-occur with hedging asset values against a price or currency drop!

  What's really hard to hedge against would be a multi-currency decline. What happens if everyone else starts printing money to protect themselves from the effects of whatever is happening in the US? A diversified set of equities bought at low valuations might be the best long-run answer. Hate to say this, but precious metals funds may also deserve a look.

Nice response.  Regarding multi-currency decline it seems like hard assets does the trick, or at least that’s what a lot of the grey beards propose. 

[Telecaster]

Yeah, I've been wondering why Republicans are so anti-US dollar.

Republicans are anti-US in general.  I'm not being hyperbolic.   Look at any American institution, courts, national parks, schools, and Republicans (in general of course) hate it.