SGE Withdrawals Hit 585 MT YTD, Up 23% YOY!

saudi goldSGE withdrawals have been in a down trend for five weeks. In these weeks withdrawals have been lower than the year to date weekly average. This is not surprisingly after an unprecedented start in 2014.  During four of the first seven weeks of this year SGE withdrawals, which equal Chinese demand, transcended global mining production.
SGE withdrawals are still 23 % up compared to the same period last year. [Read more...]

Alasdair Macleod: China’s Demand For Gold Has Trapped The West’s Central Banks

china bank runIn the rest of the world and particularly Asia, people do not think like we do. As far as they’re concerned, gold is the only long term asset worth holdingIt is the family pension fund… the financial press in the West, the mainstream media, basically rely for their information on analysts in the bullion banks. And the bullion banks are always short… Now whether the West is right or wrong is not the point. The point is there are 4 billion people in Asia who have got a very old-fashioned view of gold, and they have become wealthy over the last twenty years. And their view is likely to prevail against the <1 billion of us in North America and Western Europe. I mean it really is as simple as that. It’s not a question of Austrian economics, or Keynesian, or whatever. We’re outnumbered. [Read more...]

Chinese Gold Demand 559 MT YTD, Up 16 %

china goldIn the week ending 3/28/14,  another 36 metric tonnes of gold were withdrawn from the vaults of the Shanghai Gold Exchange.
The weekly average of the last four weeks was 35 metric tonnes. [Read more...]

Will the REAL Chinese Gold Demand Numbers Please Stand Up

gold vaultWhile there has been much debate over the amount of gold that is actually, realistically being transferred from the western bank and Central Bank vaults, all of us who study this issue can say with 100% confidence that any estimates from the World Gold Council, or from WGC-derived analyses, are incorrect by a significant amount. This much we know.
Alisdair Macleod, who is one of the few gold market analysts out there with analysis and commentary about the gold market that I believe offers accurate insight and is worth reading,  published a detail report which outlines what appears to be the most bona fide estimate of the amount of gold that is being “absorbed” by China annually.  While most of us have speculated on the size of the true amount of gold held by the PBOC, Mr. Macleod’s analysis puts together the numbers which show why the PBOC disclosure is misleadingly low.
In that I’ve been researching and studying the gold market for nearly 14 years now, I can say with complete conviction that if Alisdair’s numbers are not 100% accurate, they’re pretty da*n close to the truth.
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Deposit Insurance System Will Increase Physical Gold Demand in China

china goldAs Western economies become more and more policy and stimulus driven, socialist China is becoming more market driven, preparing to withdraw official support and let defaults occur to clean up malinvestments and unviable businesses.  The first corporate bond default in history happened past February (2014).
Efforts to carefully move towards market driven mechanisms are introduced to the people as government guarantees will slowly be withdrawn, depositors are stimulated to investigate and seek ways to protect themselves.
The defensive nature of gold in the face of defaults is highlighted. This article concerns depositors, but we should be on the watch for signs that banks themselves are encouraged to hold gold as hedge against financial risks: for this hedge to be effective, the value of gold must rise by a large magnitude to make up for any such systemic losses if official bailouts are to be avoided. This would mean that a large rise in the price of gold is implied in the policy!

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Alasdair Macleod’s Renewed Estimates of Chinese Gold Demand

Bundesbank goldI have been revisiting estimates of the quantities of gold being absorbed by China, and yet again I have had to revise them upwards. Analysis of the detail discovered in historic information in the context of China’s gold strategy has allowed me for the first time to make reasonable estimates of vaulted gold, comprised of gold accounts at commercial banks, mine output and scrap. There is also compelling evidence mine output and scrap are being accumulated by the government in its own vaults, and not being delivered to satisfy public demand.
The impact of these revelations on estimates of total identified demand and the drain on bullion stocks from outside China is likely to be dramatic, but confirms what some of us have suspected but been unable to prove.
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Elite Manipulation, Not Chinese Demand Remain in Control of PM Prices

Jamie DimonFor the past several weeks, we have shifted focus on what we see as the truer “story” of the PMs market, [Precious Metals].  Some may think we have gone off on an unrelated tangent talking about the elites and fiat currency.  The PM community has maintained a relentless focus on how much gold is being imported by China, the diminishing supply of physical gold at COMEX and LBMA, and a host of other popular statistics that support what seems to be important for gold and silver adherents in their beliefs that should ultimately lead to higher prices. 
The Law of Supply and Demand is what determines price.  Not enough are looking at how the elites are able to distort that Natural Law and bend it to their will.  It is the power they can exert, and distort, on any aspect of human life, at least in the Western world, that keeps gold and silver at unnaturally low prices.  The more cogent issue is, for how much longer can elites keep their unnatural control over the natural forces of Supply/Demand?

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Jim Willie: Gold Standard Will Return- It is Coming. It Will Shake the World

return of the kingAn important backlash is coming to the perverse USFed monetary policy.   An urgent call for global action has been seen in the G-20 and BRICS nations.
The Iran sanction workarounds are to serve as the prototype for gold trade settlement.
Shanghai will set the oil price in Yuan terms.  China will insist on making oil payments in their own Yuan currency.
Russia will service the oil demands to Europe and Asia
The Saudis will comply with Yuan payments and any other major currency in payment.
OPEC will fade while the NatGasCoop will rise under Gazprom leadership
Europe is caught in the middle, but will eventually turn to Yuan and Ruble payments for oil shipments.
The death of the Petro-Dollar is in progress.  Shock waves will force a new Split Scheiss Dollar.

The birth of the Eurasian Trade Zone is nigh.
The Gold Standard will return, not in bank transfer platforms or currency trading platforms, but in peer-to-peer transactions made in settlement. The world demands a new payment system, an alternative to the deeply flawed USD-centric current system. Even effective viable barter systems are to emerge. It is coming. It will shake the world.

The Screaming Fundamentals For Owning Gold

screaming fundamentalsChris Martenson has prepared for SD readers his mammoth annual report on the fundamental reasons for owning gold. The plethora of systemic risks that make gold a wise investment continue to expand, as does the shocking imbalance between increasing demand and tightening supply.
The punch line is this: Gold (and silver) is not in bubble territory, and its largest gains remain yet to be realized; especially if current monetary, fiscal, and fundamental supply-and-demand trends remain in play.
We approaching a moment in the great transfer of wealth where the dividing line between safety and ruin may quite simply come down to this one question: Got gold?

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Why Was China Carrying Gold?

china goldAs with copper, the Chinese are using gold as a convenient way to work around an obstacle imposed by their government. They just want to borrow at the best interest rate. Gold works even better than copper, especially as it may have a more reliable contango once you get past the front-month. The fact of temporary backwardation is an added kicker. If the front-month goes into or near backwardation, the market offers you a profit when you need to roll to a contract farther out.
I would discourage everyone from making too much out of the Chinese gold carry trade. It’s not a giant conspiracy to buy up all the gold, while suppressing the price.

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West to East Gold Exodus In Full Swing

china goldKenneth Hoffman stated in December 2013 on Bloomberg TV that the London gold vaults were virtually empty. All gold was exported to Switzerland, remelted into kilobars and sent to China. He also stated: The most interesting thing is, as we look into 2014, if there ever is interest in gold again, that gold is just not there anymore. Well guess what, there is interest in gold again, coming from China. And doesn’t seem to stop at these prices.
Of course the big question is; where on earth is this gold coming from? Let’s have a look at global trade numbers published so far this year to shine some light on this mystery. [Read more...]

Alasdair Macleod’s Market Report: Central banks add to gold reserves

Gold and Silver YTD $The correction in the gold price continued this week, falling another $40 to a low of $1290 yesterday. In all, gold has retraced nearly half this year’s rise and silver has retraced most of its rise since end-January, with the gold/silver ratio increasing to over 65 times. However, this disappointing performance for precious metals masks some strong undercurrents in gold.
Current prices appear to be stimulating new sources of physical demand in a deeply oversold physical market.
At some stage gold and silver are set to rise strongly, but in the very short term paper traders remain in control.

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Chinese Shadow Banking & Commodities: A Convenient Cover for Bullion Banks

china bank runExaggerating the scale of commodity-financed shadow banking in China supports a bearish stance, because unwinding these deals is expected by the authors of this story to release a flood of physical metal. Coinciding with China’s economic slowdown, it has already helped drive copper to four-year lows. For gold it has doubtless contributed to the recent fall in the price, favoring bullion banks unable to cover their physical commitments.
It may be too cynical to suggest that vested interests are behind the promotion of this commodity financing story, but the authors do seem to be ignoring the blindingly obvious. China’s copper stocks are backed by real demand and gold is firmly in the grip of the PBOC. China’s government and people value physical gold over superabundant fiat currencies and regard it as a hedge against economic uncertainty, not a victim of it.

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JIM RICKARDS SHOCKER: CHINA IS IMPORTING GOLD SECRETLY USING MILITARY CHANNELS, Will Announce Over 5k Tons of Gold in 2015!

Bundesbank goldThere are many estimates of official and non-official accumulation of gold in China. The truth is that no one knows the exact number because China is non-transparent about the total amount of gold coming into the country and its own mining output, and it is not-transparent about how much of that gold goes for personal acquisition and now much to government reserves. So, all analysts, myself included, are working with imperfect or incomplete information. We do know that some gold comes into China using military channels and is not reported to any authorityAs a result, even the best estimates may be too low. The best guide is to assume China has some target in mind, probably 5,000 tonnes or higher, and will continue to accumulate through diverse channels until that target is reached. My estimate is that China will announce it has over 5,000 tonnes of gold in early 2015. It probably has at least 3,000 tonnes today.
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Chinese Gold Demand Hits 488 tons YTD, Up 29 %!

China goldAlthough  last week only 34 metric tonnes of gold were withdrawn from the vaults of the Shanghai Gold Exchange (SGE), down 6.52 % from the prior week, year to date there has been a staggering 48 8 metric tonnes withdrawn, up 29 % to compared to 2013. [Read more...]