China

Fear trade enthusiasts should keep a close eye on the actions of the PBOC (China’s central bank).  Most major actions of the PBOC are not related to the love trade. They’re related to the fear trade.
A growing Chinese QE program, a possible announcement of higher official gold reserves, and/or a public endorsement of gold by the PBOC could create a very powerful rally in gold, and an even bigger one in gold stocks!
If China engages in a major QE program, its stock market could soar higher for years, and citizens would celebrate by buying vastly more gold jewellery.
Nothing the Fed does in its meeting this week will change Apple’s plans for massive sales growth in China, and nor will it change the insatiable and exponentially growing appetite of Chinese citizens to own a lot more gold.

Gold Fix ChartThe rapid 25% drop in the gold price during the April-June period of 2013 sparked a leap in gold demand that we have heard described as a once in a generation’ event. -World Gold Council

If central banks suppress the price of gold, this can only be done if physical gold is supplied to the market.
So the question is, who is currently selling gold to China?

China gold

China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan.  These banks do business at the behest of the old Bretton Woods order. The AIIB will dance to China and Russia’s tune instead.
The creation of the AIIB is a masterstroke of tactical genius. The outstanding issue now is China and Russia will need to come up with a credible plan to make their currencies a slam-dunk replacement for the dollar. We know that gold may be involved because the SCO members have been accumulating bullion; but before we get there China must manage a deliberate deflation of her credit bubble, which will be a delicate and dangerous task.
Unlike the welfare-driven economies in the west, China has sufficient political authority and internal control to survive a rapid deflation of bank credit. When this inevitably happens the economic consequences for the west will be very serious. Japan and the Eurozone are already facing economic dislocation, and despite over-optimistic employment numbers, the US economy is faltering as well. The last thing America and the dollar needs is a deflationary shock from China.

oenbThe Austrian Court of Audit expresses great concern about the disproportionate amount of official gold reserves (229.6 tonnes) stored at the Bank Of England (BOE), which will be the Austrians excuse for repatriating, “the gold depository contract with the depository in England contained deficiencies” and, “gold reserves stored abroad, internal auditing measures were lacking”.
They’re putting it blunt for an official source on a topic so sensitive as gold.

china gold

In the last trading week of January another huge quantity of gold left the vaults of the Shanghai Gold Exchange (SGE). According to the latest SGE data nearly 54 tonnes were withdrawn in week 4 (January 26 – 30), down 24 % w/w.
Year to date a staggering 255 tonnes has been withdrawn, up 4 % from the strongest January ever in 2014.

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Withdrawals from the vaults of the Shanghai Gold Exchange (SGE)accounted for an incredible 70 metric tonnes in week 2 of 2015 (12 – 16 January) .
Aggregated withdrawals in the first two weeks of this year already stand at 131 tonnes:

Total U.S. Gold Exports 2014 MAY - OCT.NEW2U.S. gold exports to Hong Kong and China jumped significantly in October.  Not only were U.S. gold exports strong in October, they were the second highest for the year.  Shipments of gold out of the U.S. spiked in January, declined in February and March and remained subdued during the summer months.
However, U.S. gold exports Jumped 70% In September, at 50.1 metric tons (mt), with the majority going to Switzerland (15.3 mt) and the United Kingdom (13 mt).
If we look at the chart below, U.S. gold exports to Hong Kong (8.5 mt) and China (3.3 mt) placed in the third and fourth position respectively:

year of the goat gold bullion coin 2015 2January is the time of the year for the Chinese to buy golden gifts for their love ones.
And that is exactly what they are currently doing en masse, according to the latest data from the Shanghai Gold Exchange (SGE).

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Simply put, QE can never be halted or even slowed.  The USFed is in a corner, with no policy options, FACING COLLAPSE, with no ability whatsoever to halt the systemic failure in progress.
The USDollar is fast losing its integrity, during a dangerous global rejection episode.   
Therefore, QE must be exported, the easy candidate Japan. Call it Operation Tokyo Twist.
The King Dollar is in the final death throes, and the entire world knows it.
When the new Scheiss Dollar arrives, the wake up call comes. Its painful devaluations will bring price inflation, supply shortage, social disorder, and shock to the gutted nation.
The Tokyo Twist will be the song on the FOREX dance floor where all the gals (fiat currencies) are ugly, in a desperate contest to be the least ugly.
The new BRICS gold & silver backed currency is at an advance stage in the design rooms, soon to see actual implementation.
The Gold Standard is to be re-installed, euphemistically called the Currency Reset. 
History is on the verge of being made.
 

elephant

Silver isn’t just a bargain in relation to gold’s value, it’s now a bargain related to gold’s tax in India!
Thanks in large part to India raising taxes on gold, in 2013, Indian silver demand hit a monstrous 6,125 tonnes!
That’s just under 200 million ounces of silver!  That means that Indians sucked in nearly 1 in every 4 ounces that our planet produced!
Whoops!  If there was ever a textbook case for “unintended consequences” and “blowback” by government action, this is it!

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If you look at a four year chart of the continuous gold futures, it shows a definitive bottom a year ago in June. Since the beginning of this year, that up-trend has actually started to turn up a little bit, the slope of it has gotten a little bit sharper… From a technical stand point, I think gold’s in really good shape. 
At some point I think you’re gonna see China and Russia sorta force the market higher in order to bring out more physical gold. 

Caption Contest 1

The Shanghai Gold Exchange will be opening up bullion trading to international investors on September 26. China is striving hard to internationalize their currency, and as well, remove the pricing privilege in markets which the West has monopolized so far.   This is a very bold move, and part of their larger plan to make China a bullion-trading hub.
Since their objective is also to internationalize the Yuan, trading will be settled in Yuan and not dollars, which of course, is another small nail in the dollar coffin. The exchange will be serviced by a 1,500 metric ton vault, which is very impressive, indeed.
As if that wasn’t big enough, the Singapore Exchange Ltd. (SGX) will also be opening up a 25 KG kilobar contract to be traded.
These Asian trading platforms will not be as opaque as Western platforms, and will be physically backed, so we believe that this will indeed be the future of international precious metals trading.
This is concrete proof that not only is the West’s gold and silver moving East; their ability to manage prices is also slipping right from under their eyes.
September is shaping up to be a very eventful and historic month, even if we do not see any great changes in price action.

China gold

There will be a defining geopolitical event next month when India, Pakistan, Iran and Mongolia become full members of the Shanghai Cooperation Organisation (SCO). This will increase the population of SCO members to an estimated 3.05 billion. We should care about this because it is the intention of the SCO to do away with the US dollar for trade settlement.

dollarAs we can see power shifting from West to East on a daily basis at the current time of writing, in the fourth quarter of this year the Shanghai Gold Exchange (SGE) will launch an international board in the Shanghai Free Trade Zone (FTZ) for investors worldwide to trade gold spot contracts denominated in renminbi.
The purpose is not only becoming the world’s primary physical gold market but also to increase pricing power and internationalize the renminbi.
The SGE international board will be another blow to the US dollar hegemony, as more people around the world will hold and use the renminbi for trading gold.

saudi goldChinese gold imports dropped for the third month in a row in April, according to new data released by the Hong Kong Census and Statistics Department.  Net gold imports from Hong Kong amounted to 67,04 tonnes, the lowest volume in more than a year.
A Shanghai Gold Trader stated:  Banks have adequate stocks from imports earlier in the year, and in some cases, even last year, that they are waiting to dispose of.   Any new imports will have to wait until they clear the backlog”.

However year to date, the Chinese gold imports from Hong Kong are 347 tonnes, which is more than the 294 tonnes after the first four months of last year.

U.S. Gold Exports Jan & Feb 2014As Russia, China and the other BRIC countries work towards a system that doesn’t include the TURD called the U.S. Dollar, Americans have less and less time to prepare for the GREATEST TRANSFER OF WEALTH…. in history.
Not only did the U.S. export 128 metric tons of gold in the first two months of the year, its supply deficit continues to increase. 
While gold exports to Hong Kong fell in February, Switzerland imported another 28 metric tons of gold during the month, more than twice the 12 metric tons it imported in January.
If we look at the chart below, we can see where the United States exported the majority of its gold.

JPM gold vaultChinese net gold imports in March, (at least 111.1 tonnes), were not sourced from London, as they have been in the past year. UK total net gold export in March collapsed 85 % m/m from 107 tonnes in February to 16 tonnes in March, net export to Switzerland fell by 72 % from 119 in February to 34 tonnes in March.
The main gold vein that ran from the UK, through Switzerland, through Hong Kong finally reaching the mainland, is drying up.
 
Are the London Gold Vaults Running on Empty?

gold smugglingThe Financial Express of Dhaka, Bangladesh, today reports on a huge increase in customs seizures of smuggled gold into Bangladesh over the last year.
The National Board of Revenue have compiled statistics showing that while only 25kg of smuggled gold was seized in 2012 in Bangladesh, this rose to 520 kgs last year.
Similar figures for the first three months of this year hit 220kg just from these two international airports.
Most legal gold arriving into Bangladesh comes from the Middle East, Singapore or Malaysia, and also via remittances from Bangladeshi immigrants. Since the import tax on gold into Bangladesh is very low, officials believe that the huge rise in smuggling is mainly because Bangladesh is being used as a transit point for gold smuggling into neighbouring India where the import tax is currently running at more than 11%, and where there is an insatiable unfulfilled demand for gold.

suisse-gold-importsIn the first quarter of this year, the United Kingdom was the largest net exporter of the precious metal to Switzerland, bringing in 270,3 tonnes of gold. The second largest supplier of gold to the Suisse vaults was the United States, exporting a net amount of 56,77 tonnes to the European country.
Any guesses where this US & UK gold ends up after a brief pit stop in Switzerland? 

bottom of the barrelChinese gold demand has dipped slightly in recent weeks.  
I can’t think of any reason why the Chinese would buy less gold, the precious metal they recognize for its true value, when gold is dirt cheap at $1300. One reason that certainly would dampen SGE withdrawals would be western supply running drymost of Chinese gold demand is supplied by imports.