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.

U.S. Gold Bullion Exports to Hong KongThe figures are out and it looks like the United States exported a record amount of gold to Hong Kong in January- a stunning 57 metric tons!  Not only is this 3 times more gold exported than January 2013 (17 mt), it was 84% more gold than the record month set in August (31 mt).  As we can see, gold bullion is fleeing the U.S. and heading to the East.  Again… that 57 mt figure is just gold bullion.
As the West continues to play games with Monopoly money and Derivatives manufacturing, the East accumulates as much gold as it possibly can.  While Main Stream Media and its Banker cohorts release bearish $1,050 price targets for gold, the Asians and Indians smile as they build the largest amount of gold stocks in the world.

Caption Contest 1The Shanghai Gold Exchange (SGE) is back on schedule publishing their trade reports on that cover the previous trading week. Last Friday’s report covered the trading week February 17 – 21. For me the most important numbers is always the amount of physical gold withdrawn from the vaults as this equals Chinese wholesale demandWithdrawals in week 8 (February 17 – 21) accounted for 49 tonnes, year to date there have already been 369 tonnes withdrawn from the vaults. If we divide the later by the number of days of the corresponding period (52) we come up with an average demand of 7.09 tonnes per day – this includes weekends and the one week holiday at Lunar year when the SGE was closed.
One would think that in coming months the price of gold and Chinese demand will get in conflict; the situation simply can’t go on like this forever.

Chinese aunties buyng gold for sale in TaiyuanWeekly Chinese Gold Demand Transcends Global Mining Production, Again.
All over the media we have seen extreme gold shopping sprees around new year and at the Lunar year in China.
This resulted in an all time Chinese gold demand record in January – which accounted for 246 tons.
It seems the Chinese are in a state to buy all the physical gold that can be supplied.

These two photos were taken yesterday by my uncle in a gold shop in Beijing. People are buying gold like groceries

china goldIn the trading week from January 20th-24th, 57 tons of physical gold were withdrawn from the SGE vaults!
This is the third week in a row SGE withdrawals have been more than weekly global mine production.
In the first 24 days of 2014 withdrawals from the SGE accounted for 216 tons. With one trading week left this month it’s very likely January 2014 will break the all time record of monthly withdrawals, surpassing the 236 tons from April 2013.
Are we witnessing the height of the Chinese gold rush?

April 12, 2013 was the beginning of a two day “super-crash” in the gold market.
In my professional opinion, the gold bull market ended on that day.

The world changed on April 12, 2013, because the Western gold bull market ended, and the Asian gold bull era began.

tugofwarOutflows from the world’s biggest gold exchange traded fund, the SPDR Gold Trust (ticker: GLD), continued yesterday for the eleventh day running, taking the total volume of gold held to back GLD shares to its lowest level since November 2011.
“It is really a tug of war between ETF selling and physical buying right now,” says Yuichi Ikemizu, head of commodity trading, Japan, at Standard Bank.   “We have seen quite good physical demand from China and Southeast Asia, but the ETF selling has put a lid on gold prices.”