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In between April 22nd and 26th, 117 tons of physical gold were withdrawn from the SGE vaults.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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Submitted by Koos Jansen, In Gold We Trust:

 

The bulk of Swiss gold export is heading east, some directly to Shanghai, some first to Hong Kong. From the Hong Kong Census And Statistics Department we know 779 tons were net imported from Switzerland into Hong Kong year to date. 651 tons more than what was net imported in total in 2012.
The Swiss only publish their total gold trade numbers every 3 months; last data was from September. All the gold that is being imported into Switzerland this year is being remelted and exported; this was also confirmed by a Swiss refinery. Exports stand at an all time record this year at 2184 tons, and there are 3 months left on the calendar. Annualized exports would be 2912 tons, which is 1362 tons more than what the Swiss exported in 2012. We may assume this difference in exports is additional supply for the east.
Physical gold is migrating West to East at an ever accelerating clip.

The most significant parameter to measure the gold distribution from west to east is the trade vein that runs from the UK through Switzerland through Hong Kong, eventually reaching Shanghai.

 

The UK Source

 

In October the UK has net exported 90 tons of gold to Switzerland, – 16 % m/m, year to date the Swiss have net received 1199 tons. The UK net exported 1326 tons in total in the first ten months of this year, of which 477,9 tons were sourced by GLD. The unusual outflows remain elevated throughout the entire year. Also note, the UK is hardly importing any gold this year, as if physical gold is difficult to source.

 

UK Gold Trade 10-13

 

UK Gold Trade 2008-2013 10-13

 

GLD inventory 10 2013

 

From 1 January until 31 October GLD lost 15.3 million shares. Can it be the Chinese redeem physical gold from GLD through “agents” like Blackrock that have sold huge amounts of shares this year and possibly redeemed these shares for physical gold through GLD’s authorized participants? Just a theory..

 

This is a picture taken on 25 November 2013.

 

Xie Blackrock

 

 

On the right we can see Mr. Xie, president of China’s third largest Sovereign Wealth Fund NSSF, on the left Mr. Lawrence Fink, chairman and CEO of BlackRock.

 

Pass The Swiss

 

The Swiss only publish their total gold trade numbers every 3 months; last data was from September. As we can see from the chart, all the gold that is being imported into Switzerland this year is being remelted and exported; this was also confirmed by a Swiss refinery. Exports stand at an all time record this year at 2184 tons, and there are 3 months left on the calendar. Annualized exports would be 2912 tons, which is 1362 tons more than what the Swiss exported in 2012. We may assume this difference in exports is additional supply for the east.

 

Switzerland Gold Trade 2013-Q3

 

 

The bulk of Swiss gold export is heading east, some directly to Shanghai, some first to Hong Kong. From the Hong Kong Census And Statistics Department we know 779 tons were net imported from Switzerland into Hong Kong year to date. 651 tons more than what was net imported in total in 2012.

 

HK Swiss gold trade 10-2013

 

The Hong Kong Trading Hub

 

West East gold ditribution 2013

 

We can see a correlation between the net amount of gold that comes into Honk Kong from Switzerland and the net amount that goes out to the mainland. Concluding, most mainland net gold imports through Hong Kong are being supplied by Switzerland.

 

We can also see strong UK net export of gold to Switzerland prior to April (in April the price of gold crashed and Chinese physical buying exploded), but this not unusual as we can see from the “UK Gold Trade” chart ranging from 2009-2013. Often huge volumes are shipped between the UK (LBMA) and Switzerland (refineries).

 

If SGE delivery is mainly supplied by import from Hong Kong, demand is certainly not waning. In November 168 tons were withdrawn from the SGE vaults, up + 21 % from October.  (compared to 0.121 tons of physical delivery at the COMEX in November. More information on the differences between physical delivery at the SGE and COMEX can be found here and here)

 

SGE vs COMEX ™ Nov 2013

 

A remarkable phenomenon that has happened in Honk Kong trade earlier this year was this:

 

Hong Kong - China gold trade monthly 10-2013

 

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? The answer: Chinese import doesn’t have to work like that. Like I  described in this article gold can be consigned by, in example, HSBC and ICBC.

 

This is how it works; the consigner HSBC (Hong Kong and Shanghai Banking Corporation) can ship the gold to the Mainland, without selling it at this stage. On arrival it has to be registered within 7 days at the SGE and move into the vaults. The gold is now merely transported, not sold.

 

The consignee ICBC will then ask HSBC for a quote in USD/oz (International Spot) and then decides the offer RMB price at the SGE. The SGE Premium is based upon freight costs, insurance costs, customs declaration fee, storage fee, ICBC’s profit, etc.

 

After the gold is sold on the SGE, ICBC must pay HSBC in USD within 2 days and also needs to let the State Administration of Foreign Exchange verify the payment.

 

I am aware that there was an arbitrage opportunity  in early 2013 that could have explained some of the high volumes of gold trade between Hong Kong and the mainland. Though this couldn’t have explained the record net gold export, just before the price dropped in April and the SGE was stormed for physical gold.

 

Shanghai Gold Exchange gold withdrawn from vault week 50, 2013

 

 

week 16 sge

 

In between 22 and 26 April 117 tons of physical gold was 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. Just a theory..

 

In any case, the main vain has brought the mainland 957 tons of gold in the first ten months of this year, annualized 1148 tons. But Hong Kong is certainly not the only port through which the mainland is importing gold,  my analysis shows the mainland’s total net gold import can reach up to 2000 tons this year.

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Hong Kong - China gold trade 10-2013

 

Hong Kong net imported 510 tons of gold in this period. Further research should point out how much of this was smuggled into the mainland.

 

Hong Kong gold trade 10-2013

 

 

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  1. @hromano1030
    Forgive me for sending a post to you (seeing as you don’t want to be contaminated by me anymore), but I found the Youtube video for you not from an Israeli or Jew, but a video of a “Palestinian” Arab from Bethlehem who was related to the former Islamic Grand Mufti of Jerusalem, and he experienced wars against Israel, bombed a bank in Israel and experienced arrest at the hands of Israeli forces.
    Fascinating man. Enjoy.

    • If that makes you happy sir.
      Watch the video by this Palestinian Arab who bombed an Israeli bank, who was arrested by Israel and whose family members were killed by Israeli bullets.
      https://www.youtube.com/watch?v=oAjy0SKXpTk Here he discusses Obama’s harassment against him … you’d like this Palestinian Arab’s views, because he is exposing Obama’s help of Al-Qaeda in Syria.
      BTW, what he says about government watching his phones: I know first-hand from people who worked in your government in the 80′s that this was being done THEN (I knew about this kind of stuff as fact in the early 90′s… Snowden is 20 years late hahahah).

  2. back when this drive by looting took place on April 12 to 15, 2013, the blogs lit up about who was the culprit.
      It seemed to settle on the ESF/Fed, the Chinese or the Euro traders.  In the long run, the Chinese had enough capital to execute 500 ton gold paper trades with little concern as to what the cost might be. 
    They were able to buy gold with a $400 an ounce discount. Maybe an even greater discount if gold drops more.
    Nice deal if you can acquire 2,500 tons of gold a year with a discount of $13,000,000 a ton. 
    I think that comes to about $32 billion savings.  Naked shorting, the gift that keeps on giving. And JPM helped failitate this. What was their rake on these transactions. Rumor has it that Goldman helped orchestrate the actual drive-by
    I tend to think that Doc and Eric are correct that the bottom is in but there will be further adjustments to price before the prices start to rise in earnest

    • The question should never be “is the bottom in?” as it really doesn’t matter in the grand scheme to a “stacker”.  We know the Chinese are preparing to either hedge against or deliver something very shocking to the world of FIAT some time in the future.  We see the extreme abuse of FIAT by many countries.  History has shown the outcome and although we have never seen this type of behavior on such a grand scale before, we do know the ending.  The end should have been 2008 if they wanted to keep FIAT alive.  
      The only way forward now is MOAR credit being dumped into the system to keep the “body alive” at the expense of the currency.  Think of it as “poisoning the blood to the keep the organs working”.   This is not to give little Billy another “nice Christmas” but to buy time for the governments to prepare for the coming civil unrest when the FIAT finally meets is death.    
      I must admit JSinclair seemed over the top to me.   However as the future progresses I find he may be way ahead of his time to most of us.   I agree with him now on his “GOTS” theory.   I have stopped stacking and started “HOARDING”.  
      Forget prices and bounces and bumps and bottoms: GET THE F____ OUT of THE SYSTEM, NOW!!! (while you have a chance). 

  3. Everyone keeps stating the reasons the price of gold went down (or up) is beause of manipulation, hedge funds activities, HFT algorithms, etc. Wake up, Zombies !!! The answer is simple – the price of gold goes Up or Down is simple – because the computer tells you so !!! Think about that, in depth !
     

    • If I read you right, it is like saying as I have before, that the price of metals is paper/electronic fiction and the real value of the phyzz is higher due to supply and demand that cannot be as easily skewed. 20 – 30% above spot is about normal now and let’s face it, when the obvious becomes mainstream, you won’t buy it at any price……almost.

  4. And it’s supposed to be just coincidence that the April take-down coincided with the Boston debacle AND the Bush/Obama administrations being outed for war crimes by that commission? Neither made it to the newspapers that fateful day.
    If China did it, either US intelligence saw it long coming and took advantage (amateurist self bombing), or the Chinese foresaw it all and decided to do the take-own in the shadows of news about to break.

    • I’ll take you back a little further- remember Sunday night, May 1st, 2011?  The price of silver gets hammered down so violently it was incredible, then a half hour after that began, the usurper came on the tv with his riveting account of the heroic take-down of Obama Bin Laden, who had probably died of kidney failure in 2001.  For the next couple weeks there were lots of stories about how this event ramped up the stock market and damaged the metals.  
      The PMs are not important, barbarous relics, but the gub seems to think they are central to the plot, don’t they?
      Hang tough, me hearties.

    • @Conax
      Good one. Although it’s odd that only silver was hit as hard. Gold was allowed to rally another 4 months, and make headlines. To sucker more in? If so, it seems to have worked. Perhaps silver was not allowed to go to $70 as it would hit the shorters too hard, and would lure in too crazy an actual demand world-wide?
      But yeah, all the news comes in the same day. And I don’t think Osama got to make it to September 2001. Poor fellow got his identity sold by his family. In return for a decade of loyalty to Saudi Arabia. Saudis supposedly did 911 (KSA didn’t defend) and Iraq was attacked instantly, over WOMD’s they did not have nor need.

  5. I got it, its the Chinese!!!! We all seen the videos of people in power who have “human” suits, but really are reptilians. I think that underneath the Reptilian Suits, its the Chinese!!!!
     
    But what’s under the Chinese Mask?, maybe, its the person who was really wearing the human suit, come reptilian mask come Chinese mask!
     
     

  6. “But why would anybody import expensive gold  in March to sell it for bottom prices in April?”
     
    In order for this to make sense, one first has to realize that to communists money is just another tool among many that can be used to serve their political purposes.  In this case, it may very well be world financial leadership via a gold-backed currency, against which no fiat currency can compete.

    They do not worry a lot about the price of gold.  They are simply buying ALL that they can WHEN they can.  They have trillions of US dollars, as well as euros, yen, etc., that they do not especially want, so why not convert what they do not want into something that they do want while that which they do not want still retains some value?  Yes, I can see China being interested in manipulating the price of gold lower and it is likely that they are doing so.  That allows them to do the same thing that most of us are doing… buying the PM price dips.  Only in their case, they have the financial firepower to actually create the dips on demand.
     
    The Chinese are a very intelligent group of people.  They KNOW that the fate of fiat is that it will die.  Knowing that other countries use fiat money gives the Chinese a weapon that they can use against their competitors, most notably the US, Japan, South Korea, and India. If they can do something that weakens fiat currencies it will produce the same result as strengthening China. Yes, China also uses a fiat currency but for how much longer? They are not buying thousands of tons of gold because it looks pretty. They are buying it so they can back their currency at a time of their choosing… and a most propitious time that will be!

    They are also VERY patient, so if they know that fiat will eventually die, their mission is to convert all of the fiat they have, especially foreign fiat currencies, into gold in order to preserve their wealth beyond the death of fiat currencies.  
     
    Gold is the ultimate non-fiat.  It is real.  It is money.  It has a 5,000+ year history and has been highly valued by all human cultures that have discovered it. It is not subject to the whims of the various governments or central banks and their printing presses.  
     
    The Chinese tend to be very pragmatic.  If they are buying and hoarding all the gold they can, it is obvious to one and all that there are GOOD reasons for this activity.  Given that, it is foolish not to be buying gold and gold’s little sister, silver, whenever we can.
     

  7. A couple years ago, when the Peking Oligarchs banned all those private Free Market regional metals exchanges in the Provinces, I KNEW (and said as much here) that the centralized ‘official exchange’ they were setting up HAD to be yet another cog in the manipulation game-board. It became even clearer when we were treated to the report that a Rothschild was a key member on its board.

    So, here’s another thought that popped into my head … what if the volume of tungsten bars was a LOT bigger than was revealed and the Chinese were taking really staggering hits when they began converting their ‘reserves’? That could explain both their program of holding down the ‘prices’ AND having EVERYTHING re-smelted and formed into their own proprietary ingots … AND … being locked away from trade flows for the time being. I don’t know, but it makes sense to my wild imagination.

  8. You guys are way too out there on these theories. It has to be simpler than that. I think China was invaded by Aliens from Alpha Centauri and are forcing the Rothschild’s to give all their gold to them and they use it to power their mother ship.  I could be wrong and the aliens are sending it back to their home planet where they use it as fuel since their world got colder due to their planet going through a global warming phase because of an increase of unicorn farts. They have to be allergic to silver and are giving us their technology so it is consumed and thus eliminated from existence. The best thing to do is probably save all you can of both, for when they leave. Don’t think they are planning to come back. I have a few charts and a couple of youtube videos that prove this. One of the charts shows a correlation of unicorn farts vs. gold disappearance that I got from one of the aliens working in the ships boiler room. Haven’t heard from the guy in awhile, expect they are on alert getting ready to leave, so it may already be too late to buy much more. He might just be avoiding me since the last visit he got sick and threw up from all the silver I had around, probably for the best, he was quite annoying.

    • You sounded quite believable until we got to the part about the ship’s boiler room.
      Everybody knows spaceships don’t have boilers.
      How would they exhaust the steam into outer space as they are passing through the ethereal void?

    • No problem, Woolly.  The boiler room is a fusion-powered closed-loop system, so there is never any water exhausted as steam.  In the cold depths of space, even a VERY small condenser can condense a lot of steam.  The trick is to not let it freeze solid and plug up the condenser tubes.  ;-)
       

  9. No one will ever convince me that Dimon and company were not the ones who did this.  JP Morgan is the most courrpt group on this planet.  China was the beneficiary but, JP Morgan was the hand that guided the evil mind!

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