Are Chinese Gold Imports Really Down This Year?

china goldThe answer is, we don’t know.  And we don’t know because we can’t know.  Reuters ran a story this morning which asserted that China’s gold imports had dropped to a 16-month low in May.  But the truth is, we don’t know what China’s total imports in May were.
There have been several reports and commentaries which suggest that China’s demand for gold is declining this year.
The conclusion is that the gold is headed for another down-leg.
Seemingly, the current action in the gold market is contradicting the premise that gold is headed lower
If I were U.S. policy-makers, I would be worried about the reasons China has decided to go “cloak and dagger” on their gold imports…


 

Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics

Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong.   - Ayn Rand

The answer is, we don’t know.  And we don’t know because we can’t know.  Reuters ran a story this morning which asserted that China’s gold imports had dropped to a 16-month low in May.  But the truth is, we don’t know what China’s total imports in May were.

We do know that the World Gold Council’s 2013 tally of China’s gold imports was egregiously inaccurate:   China To WGC:  “HUH?”   Not only that, according to the general manager of the precious metals department for the State-run Industrial & Commercial Bank of China, the ICBC  is not meeting the demand for gold by the market.  Hmm…

In fact, it’s been impossible to track China’s total gold imports since late April, when China began to allow gold imports into the mainland through Beijing:   China Opens Beijing To Gold Imports.

While Hong Kong publishes monthly reports on the amount of gold supplied to China, mainland China does not release trade data on gold.  Prior to this, we could track China’s gold imports from data reported by Hong Kong and the Shanghai Gold Exchange.

The move to make China’s gold import volume opaque is intentional:   “The bulk of gold bought by China used to flow through Hong Kong, making its export data a useful proxy for Chinese demand as Beijing treats data about imports of the precious metal as a state secret”  (LINK).

I bring this up because I’ve seen several reports and blog commentaries which suggest that China’s demand for gold is declining this year.  The conclusion is that the gold is headed for another down-leg.

Seemingly, the current action in the gold market is contradicting the premise that gold is headed lower…If I were U.S. policy-makers, I would be worried about the reasons China has decided to go “cloak and dagger” on their gold imports…


Comments

  1. speculation that China’s gold buying is down this year?   Could be.  Every country that cherishes gold from India to Russia to Saudi Arabia, Iran, Turkey etc etc is up   Maybe it’s just a little problem of access gold.  If the supply is XXX and the entire XXX is spoken for by 10 countries, China not able to buy their 2000 tons this year  I bet the gold miners are producing less this year too

  2. Those Asians are just chasing their tale over this Gold market.  I’m going for white metal.  Silver….Platinum.  We’ll see who winds up on top of this dog pile soon enough. 

  3. Maybe they have exhausted their suppliers, purchasing everything they can get their hot little hands on and now just sitting back with their stacks safely stashed away ~
     

  4. Is it possible, that if the China imports are truly down as stated in the Reuters article, that the reason the imports are down, is because the West has finally run out of gold to ship?  Let’s recall that US failed to return Germany’s gold, and there was an article last week (Bloomberg I believe) asserting that Germany no longer wanted it’s gold back.  Yet the next day, a spokesperson for Germany, claimed the article was a fraud, and that Germany was still in the process of repatriating it’s gold. 
     
    Friday it there was an addendum to the China/Russia gas deal, whereby the initial announcement conspicuously made no mention of the mode of settlement for the deal, and then Friday it was announced that rubles and Yuan would be used.  Just another jab to the USD??  Who’s to say that gold/silver won’t also be used?  There is a reason Russia and China have imported so much PM in the past few years.
    Although difficult to prove, I think it is a safe bet, that the West, namely the US, is getting extremely desperate, and they are no longer able to convince the world that all is well in the USA.
     
    I believe the article was either another poor attempt to cool PM interest, just as the Bloomberg article last week, or the jig is going to be up very soon, since the West has no more gold to ship to China.

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