Chinese Physical Gold Demand YTD 369 tons, Up 51 % Y/Y!

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 For me the most important numbers is always the amount of physical gold withdrawn from the vaults as this equals Chinese wholesale demandWithdrawals in week 8 (February 17 – 21) accounted for 49 tonnes, year to date there have already been 369 tonnes withdrawn from the vaults.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. [Read more...]

Alasdair Macleod Dissects China’s gold demand

Caption Contest 1There are very few figures coming out of China that you can rely upon, and this is particularly true of gold imports. Instead, you have to take what is available and apply a judicious mix of logic and deduction.
Mainland China does not publish imports and exports. The only figures for gold supplied to the Chinese public are of gold delivered through the Shanghai Gold Exchange and out of their registered vaults, which for 2013 totalled 2,197 tonnes. Most of this I have reason to believe is imported, only some of which is through Hong Kong. And to think that gold is only imported through Hong Kong is a major mistake. [Read more...]

China Not Only Imports Gold Through Hong Kong

China goldThere are some gold analysts that create presumptions about Chinese gold demand by looking at how much gold Hong Kong net exports to the mainland, as if the mainland only imports gold from Hong Kong.  This a misconception; just because China doesn’t officially disclose their gold trade numbers doesn’t mean they only import gold through Hong Kong.
Some news outlets have been reporting on falling net imports by China in November, from 130 tons in October to 61 tons in November, thereby suggesting demand is fading. This suggestion ignores the fact that the mainland doesn’t exclusively import gold from Hong Kong. It’s true that most of China’s gold imports emanate from Hong Kong, but this is not an accurate reflection of Chinese demand.
The mainland has 22,117 kilometers (13,743 miles) of border, does anyone really believe that gold does not enter China through ports located anywhere at the border other than Hong Kong? [Read more...]

Gold Drain Continues As 2128 Metric Tons Withdrawn From Shanghai Vaults YTD!

SGE weekly 51In the end-stages of 2013, in between December 16th and 20th, the “Chinese Aunties” have withdrawn 55 tons of gold from the vaults of the Shanghai Gold Exchange. That’s more than the official gold reserves of Finland and most likely more than what has been globally mined that week. The Chinese gold rush has been in an upward trend in recent weeks.
Lets see how much gold will be drawn from the vaults in the last trading week of 2013. The yearly total of withdrawals, which equal Chinese gold demand, are on track to reach 2169 tons. [Read more...]

How the Chinese Smuggle Gold From Hong Kong into the Mainland

Bernanke-Dimon-Fed-TunnelWondering what Hong  Kong is doing with 2,000 tons of  gold imports (510 net tons) year to date?  Apparently smuggling the phyzz into the mainland. [Read more...]

Evidence Suggests China Arranged April Gold Crash!

There was a huge spike in gold exports from Hong Kong to the mainland in March. As if someone knew there was going to be immense demand for physical in April in the mainland. But why would anybody import expensive gold  in March to sell it for bottom prices in April?
In between April 22nd and 26th, 117 tons of physical gold were withdrawn from the SGE vaults. That is an exceptional amount of gold to hold in stock-  unless one knew demand would rise significantly and had made pre-orders accordingly.

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Record U.S. Gold Bullion Exports Head to Hong Kong & Switzerland

2013 Top 3 US Gold Bullion Exports newCompiling all the figures  for the past three years, the United States has a negative 171 mt of net gold supply so far in 2013.  This means that the U.S. has exported 171 mt more gold than it has produced from its mining sector and imports combined.
In 2011, the U.S. had a positive net supply of 265 mt, but due to high demand for gold abroad this fell in 2012 to a negative 127 mt.  And as you can see, U.S. net gold supply continues to decline — a negative 298 mt since the beginning of 2012.  While it’s no secret to anyone in the precious metal community, the majority of U.S. gold exports found their way to Hong Kong and Switzerland.
When we realize that the majority of U.S. gold exports to Switzerland and the U.K. are probably making their way to the East…. we can assume that the overwhelming majority of the gold leaving the shores of the United States is most certainly ending up in China. [Read more...]

Gold ETF Holdings Gobbled Up By China- Where Is The Gold To Feed Golden Dragon In 2014?

chinese gold rush2013 has been a torrid year for gold and it is down 26%. Given the still strong fundamentals, we are confident that in a few years, 2013 will be seen as a mere blip in the context of a long term, secular bull market which will likely see gold prices have a parabolic peak between 2016 and 2020.
ETP liquidations have been one of the primary reasons for gold’s weakness in 2013.  However, the supply demand data clearly shows that ETP liquidations are being matched by robust global demand, especially in China. Even if ETP holdings dropped by another 300 plus tonnes in 2014, average Chinese imports through Hong Kong alone are running at well over 100 tonnes per month.
Outflows of gold from ETFs amounted to 24.3 million ounces, nearly 700 metric tonnes, in 2013 from their peak at the end of 2012. Much of this gold was taken out of ETF holdings in London and shipped to refineries in Switzerland, where it was melted down and made into kilogramme bars, then sent to Hong Kong and ultimately to China.
Imports from Hong Kong to China totaled 26.6 million ounces or 754 metric tonnes through September alone. It is unknown where the gold would come from to replenish these ETF holdings were there a sudden surge in demand in the West in the event of a new sovereign debt crisis or a Lehman Brothers style contagion event. [Read more...]

China’s Mainland Gold Imports Accelerating- Up 200% YOY!

Hong Kong - China gold trade 10-2013This week the the Hong Kong Census and Statistics Department officially released their trade numbers from October.
Most significant is the amount of gold net exported to the mainland, up 21 tons from 109 tons in September to 130.2 tons in October, + 19 % m/m, +446 % y/y, just shy of the all time record of 130.3 tons in March, reinforcing an upward trend that began in 2011.
Year to date Hong Kong’s net gold export to the mainland stands at 957 tons, a massive 200% increase relative to the same period in 2012. [Read more...]

Gold Borrowing Costs Hit Post-Lehman High – Hong Kong Jewellers and Banks Face Supply Issues

Gold is little changed near a one-week high, and is marginally higher in dollars as the dollar has retreated from a three-year high, and higher in most currencies. The gold market continues to digest the ramifications of gold borrowing costs surging to the highest since the post-Lehman Brothers scramble for gold bullion. Gold Forward Offered Rates (GOFO) or the cost to borrow gold remains negative and overnight the 1 month GOFO has gone from -0.106% to -0.11167%. Other durations eased marginally. The lack of liquidity in the the interbank London Good Delivery gold market (400 ounce gold bars) has pushed gold forward rates, known as “gofo”, into negative territory, meaning that gold for future delivery is trading at a discount to physical market prices – a rare situation that has occurred only after the Lehman Brothers collapse and near the bottom of the gold market in 1999. The last time forwards were negative was in November 2008, when a scramble for physical gold led a sharp price rally of 46% from $682/oz to over $1,000/oz between October 2008 and February 2009. [Read more...]

Shanghai Gold Volume Shock

Yesterday marked the beginning of extended trading hours (night trading) for the Shanghai futures exchange (SHFE), and volume was superb.  The average trading volume during the day is about 90,000 contracts. The first night session saw more than 220,000 contracts change hands!
Slowly, Shanghai’s paper gold market should begin to rival the COMEX.   That’s excellent news for bullish gold investors in the West! [Read more...]

Does China Plan To Back The Yuan With Gold And Make It The Primary Global Reserve Currency?

What in the world is China up to?  Why are the Chinese hoarding so much gold?  Does China plan to back the yuan with gold and turn it into a global reserve currency?  Could it be possible that China actually intends for the yuan to eventually replace the U.S. dollar as the primary reserve currency of the planet?  Most people in the western world assume that China just wants a “seat at the table” and is content to let the United States run the show.  But that isn’t the case at all.  The truth is that China doesn’t just want to compete with the United States.  Rather, China actually plans to replace the United States as the dominant economic power on the planet.  In fact, China already accounts for more global trade than the United States does.  So what would happen one day if China announced that it was backing the yuan with gold and that it would no longer be using the U.S. dollar in international trade?  It would cause a financial shift so cataclysmic that it is hard to even imagine.

It won’t happen next week or next month, but eventually we could see China back the yuan with gold.
When that happens, it is going to be a complete and utter financial disaster for the United States.


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India Aims to Restrict Gold Imports As China Doubles Previous Gold Import Record in March!

China Gold June Imports_0Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers underscored increased bullion demand in the world’s second-largest economy. This demand was fuelled no doubt by the record fall in the gold price on April 12th.

Mainland buyers purchased 223,519 kilograms (223.52 metric tons), including scrap, compared with 97,106 kilograms in February, according to Hong Kong government data. If this buying trend continues the Chinese look set to break all previous gold consumption records. [Read more...]

Turkey’s Silver Imports Surge 31% and Gold Imports Climb to 8 Month High

Physical gold and silver demand remains robust in many markets internationally. Demand from the Middle East remains robust as seen in the near record imports of gold and silver into Turkey. Turkey’s gold imports climbed to an eight-month high in March as prices averaged the lowest since May, according to the Istanbul Gold Exchange. Silver imports rose 31% from a month earlier according to Bloomberg. Gold imports increased to 18.26 metric tons, the most since July. That’s up from 17.34 tons in February and compared with 2.91 tons a year earlier, data on the exchange’s website show. The country shipped in 120.8 tons last year. Turkey was the fourth-biggest gold consumer in 2012, according to the London-based World Gold Council. Bullion averaged $1,593.62 an ounce last month and is trading about 17% below the record nominal high of $1,921.15 set in September 2011. [Read more...]

China’s $3.3 Trillion FX Reserves Could Buy All World’s Gold Twice

China’s foreign currency reserves have surged more than 700% since 2004 and are now enough to buy every central bank’s official gold supply — twice. The Bloomberg CHART OF THE DAY shows how China’s foreign reserves surpassed the value of all official bullion holdings in January 2004 and rose to $3.3 trillion at the end of 2012. The price of gold has failed to keep pace with the surge in the value of Chinese and global foreign exchange holdings. Gold has increased just 263% from 2004 through to February 28, with the registered volume little changed, according to data based on International Monetary Fund and World Gold Council figures. By comparison, China’s reserves rose 721% through 2012, while the combined total among Brazil, Russia and India rose about 400% to $1.1 trillion. [Read more...]