China Imports 245 Tonnes Of Silver In February And Qatar SWF “Interested” In Buying Silver

Tyler Durden's picture

From GoldCore

China Imports 245 Tonnes of Silver in February and Qatar SWF “Interested” in Buying Silver

Gold and silver rose on the open in Asia and have continued those gains so far in European trading with the Libyan military conflict leading to a safe haven bid and falls in the dollar and yen. The all time and multiyear nominal dollar highs set on March 7th ($1,444.95/oz and $36.75/oz) look set to be challenged as gold is less than 1% from its record high and silver less than 2% from its nominal recent high.

Safe haven demand continues especially in Asia and macroeconomic and geopolitical risk remains elevated. The tragedy in Japan and possibility of an ecological catastrophe has clouded the economic picture and created even more uncertainty which will lead to continuing physical demand.

In Japan, many ATMs have not been working for days now and this is leading to safe haven demand for gold. Should efforts to sort out the ATM problem not be resolved this week it could out pressure on the already strained Japanese financial system.

Iran and Other Central Banks Secretly Increasing Gold Reserves

News that Iran and other nations with large dollar currency reserves have greatly increased their gold reserves (see News) will not come as a surprise to our readers. It stands to reason that they would given the degree of exposure which most creditor nations have to the U.S. dollar. It also stands to reason as some of them do not have cordial relations with Washington and may be reluctant to fund the U.S. continuing imprudent fiscal policies.

Gold was not the only precious metal being bought with the FT reporting that the sovereign wealth fund of Qatar, the Qatar Investment Authority is reportedly interested in acquiring both and gold and silver.

The QIA has assets estimated to exceed $65 billion and this one sovereign wealth fund alone could easily corner the very small physical silver market which is worth some $36 billion at today’s prices (1 billion ounces of above ground, investment grade refined silver bullion multiply by $36 per ounce).

China Imports 245 Tonnes of Silver in February and Qatar SWF “Interested” in Buying Silver

Central banks and sovereign wealth funds with massive exposure to the dollar, such as the Russians and Chinese, are not going to shout from the roof tops their intentions to diversify into gold and silver bullion as this would lead to a surge in bullion prices and an even greater depreciation of their dollar holdings.

China imported 245.6 metric tons of silver in February. The figure is close to the 260.6 metric tons imported in February 2010 and suggests that the Chinese are more than willing to buy silver at over $30 per ounce. It also suggests that the record Chinese imports of 3,475,394 kilos seen in 2010 (a massive four fold increase from 2009) may be again attained in 2011.

This demand is likely from the private sector rather than official but it is quite possible that there has been official buying in recent months. This may have come from the Chinese State Administration of Foreign Exchange (SAFE) which manages nearly $3 trillion of currency reserves. The Chinese has experienced the collapse of a paper currency and hyperinflation as recently as 1949 and therefore appreciate the value of gold (and silver) as currencies which cannot be debased.

NEWS

(Financial Times) -- Iran bought gold to cut dollar exposure

Iran has bought large amounts of gold in the international market, according to a senior Bank of England official, in a sign of how growing political pressure has driven Tehran to reduce its exposure to the US dollar.

Andrew Bailey, head of banking at the Bank of England, told an American official that the central bank had observed “significant moves by Iran to purchase gold”, according to a US diplomatic cable obtained by WikiLeaks and seen by the Financial Times.

Mr Bailey said the gold buying “was an attempt by Iran to protect its reserves from risk of seizure”.
Market observers believe Tehran has been one of the biggest buyers of bullion over the past decade after China, Russia and India, and is among the 20 largest holders of gold reserves.

They estimate it holds more than 300 tonnes of gold, up from 168.4 tonnes in 1996, the date of the most recent International Monetary Fund data.

The cable, dated June 2006, is the first official confirmation of Tehran’s buying.

Last year central banks became net buyers of bullion after 22 years of large sales, helping drive gold prices to all-time nominal highs. Trades by central banks are often kept secret.

Bankers said other Middle Eastern countries had also been quietly adding to gold holdings to diversify away from the dollar amid political tensions and volatility in currency markets.

“The totality of central bank reserves is not what is reported to the IMF,” said Philip Klapwijk, executive chairman of GFMS, a precious metals consultancy. “There’s probably another 10 per cent on top of that.”

Cables obtained by WikiLeaks cite Jordan’s prime minister as saying the central bank was “instructed to increase its holdings” of gold, and a Qatar Investment Authority official as saying the QIA was interested in buying gold and silver.
“There is no question some Middle Eastern countries are very interested in buying gold,” said George Milling-Stanley, head of government affairs at the mining industry-backed World Gold Council.

In the past two months, the political unrest in the Middle East has helped propel gold to a record price of $1,444.40 a troy ounce.

The Bank of England declined to comment on the cables, but did not dispute their contents. The central banks of Iran and Jordan and the QIA did not respond to requests for comment.QIA did not respond to requests for comment.

(MarketWatch) -- Mizuho's ATM crash may last to Tuesday or longer

Mizuho Bank's system-wide breakdown, which has led to millions of Japanese ATM users being unable to withdraw cash or receive salary payments, could have far-reaching implications and put a wider strain on Japan's banking system if its efforts to recover from the glitch fail this week.

The outages have affected so many people that Japan's Financial Services Agency, the nation's regulatory watchdog, is considering disciplining Mizuho, a person familiar with the matter said. The FSA was not immediately available for comment.

Mizuho is now facing its biggest system crisis in nearly a decade, amid a surge in demand for cash on hand as fears intensify from possible radiation leaks from a nuclear plant damaged by Friday's earthquake, coupled with the fact that most companies are increasing transactions toward the end of Japanese fiscal year through March 31.

The system crash, which Mizuho blamed on excessive deposit activity following the devastating earthquake, also comes at a time when other banks and industries are struggling to cope with intermittent power outages around the greater Tokyo region. Most banks have been forced to temporarily shut down some of their ATMs due to blackouts, while others are voluntarily shutting down their ATMs to help save power.

The retail banking unit of Mizuho Financial Group Inc. (8411.TO), Japan's third largest bank by market capitalization, said it aims to fully restore the system after the three-day weekend through Monday, but it remains unclear whether operations will return to normal operations on Tuesday.

On Sunday, Mizuho had operational level talks with its archrivals, the Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp., over how they could help Mizuho with transaction settlements, in case Mizuho's troubles drag on, another person familiar with the matter said. Underscoring the gravity of the situation, the FSA has asked Mizuho's rivals to help it through this crisis.

The two lenders are considering shouldering some of Mizuho's load of unprocessed settlements. BTMU and SMBC, the core banking units of Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Banking Corp. are looking into how many companies' payments they can handle without overburdening their own systems, the person said. Both banks were not immediately available for comment.

The lender's system glitch, which occurred from Tuesday, affected more than 1 million cash transfer orders worth about Y830 billion ($10.3 billion) so far.

270,000 transactions that were placed at the bank earlier this week, were processed, but 890,000 transactions including salary payments have been not yet processed, Mizuho said Sunday.

All of its 38,000 ATMs at its branches and convenience stores have been shut down between Saturday and Monday to speed up the system's recovery. In its place, Mizuho extended operating hours through the three-day weekend through Monday at its 440 branches for account holders whose salary payments have been delayed by the system problem, allowing them to withdraw up to Y100,000.

Mizuho Bank President Satoru Nishibori earlier said that the bank is still investigating the locations of the branches where the problems originated and establishing why the transactions failed to process, but determining the reason will take some time.

The breakdown is the most serious faced by Mizuho since 2002, when it experienced similar problems that led to delays in processing 2.5 million public utility payments and other account settlements.

(Bloomberg) -- Gold Climbs in New York as Allied Aircraft Attack Libyan Targets

Gold climbed for a fourth day in New York as investors sought a protection of wealth from air strikes in Libya and on concern unrest may spread in the region. Allied officials said two days of missile and aircraft strikes have effectively grounded Muammar Qaddafi’s air force.

The leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.” Yemen’s President Ali Abdullah Saleh fired his cabinet yesterday and faced a growing internal revolt. Gold futures reached a record $1,445.70 an ounce on March 7.

 As “tensions in the Middle East and North Africa region increase, the precious metals, particularly gold and silver, could be poised for further gains as investors seek to diversify towards safe-haven asset types,” James Moore, an analyst at TheBullionDesk.com in London, said in a report.

(Bloomberg) -- China’s Silver Imports in February Were 245.6 Tons
China’s imports of silver in February were 245.6 metric tons, the customs agency said. Imports of platinum were 7.3 tons and palladium shipments were 3.3 tons, it said today.

 

 

 

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66Sexy's picture

Big moon, big silver.

 

m-o-o-n. that spells 'silver'.

eigenvalue's picture

No, silver should go to The Andromeda Nebula!  Moon is a too conservative target!

dlmaniac's picture

UN is about to establish a No-Silver zone in Qatar citing their evil attempt to bust the innocent JPMorgue as the reason.

Thomas's picture

So how can the Chinese be importing that much when the above ground supplies are reputed to be about a billion ounces? Something ain't addin' up.

tmosley's picture

IIRC, they have purchased a number of mines around the world, and are simply diverting the silver produced there back to China.

EscapeKey's picture

The paper or physical variety?

Zero Govt's picture

Turd

Elliott (Idiot) Wave will drive it through £36.00 ...everytime these retards predict Gold and Silver to drop they rise. The morons did it again last week and sure enough this week up they go

Rob Prechter and Steven Hochberg are like clowns at a kids party blindfold trying to pin the tail on the donkey. They've been pinning the tail (5th and final wave) on Gold and Silver every month since May 2009 and it's beyond a farce. The failure rate for their predictions "technical indicators" is above 90% which is worse than a blindfold (and drunk) clown

Prechters Elliott (Idiot) Wave clowns need your help ...in fact a 9 year old kid tossing a coin (50/50) could beat Prechters Idioticians by a factor of 500% on predicting the PM, stock indexes and US Dollar direction

SilverTech's picture

245 tonnes is about 8 million toz. Not really that much when silver production is about 800 million toz per year.

DosZap's picture

Likely all they could get their hands on at THEIR price.

Math Man's picture

China is insignificant compared to SLV.  SLV increased holdings by almost 8mm tons on Feburary 24th alone!

As SLV holdings go, so does the silver price. 

 

mark mchugh's picture

Laws, yes!

Didn't care much for the book, but the reference made me laugh out loud.

Oh regional Indian's picture

Indeed. In all my years of buying, this is the first time (last week) when the dealer took a deposit as there was NO physical available. supposed to deliver last Saturday, but has not called. India has been gold-blinded for ever. Just now waking up to SIlver as an investment alrternative.

Pretty interesting. And the big moon was the pull. I expect Silver to disconnect and take off shortly. Shortly!!! Hah!

ORI

chopper read's picture

WHAT ARE THEY THINKING? DON'T THEY KNOW THAT THEY CANNOT EAT SILVER IN AN EMERGENCY, AND IT DOES NOT PAY A DIVIDEND?

DosZap's picture

What pays a Dividend that you can trust?

Nothing in this country.

LoneStarHog's picture

/Sarcasm On/ Yeah ... well ... apparently these countries are not reading the works of Karl Denninger at The Market Ticker. I'll have another glass of Kool-Aid, thanks. /Sarcasm Off/

Bay of Pigs's picture

Like many, KD is willfully blind and ignorant to something so obvious and yet, chooses to ignore it. History and the facts are not on his side. 

His reputation (whatever is left of it) will be shot to pieces soon enough. 

Eternal Student's picture

I'm curious. Does anyone happen to know Denninger's actual educational background?

The reason why I ask is that he's done a lot on energy and Japan recently, and made an incredibly stupid comment. I have to wonder whether he's ever done a thermodynamics problem in his life, let alone passed a class in it.

Azannoth's picture

The chickens are coming home to roost

EscapeKey's picture

It's baked into the pie.

Long-John-Silver's picture

You always boil the chicken you bake into a pie. Did you learn nothing from your grandmother?

Sudden Debt's picture

Quit a few things actually:

If somebody is down: KICK HIM IN THE FACE!

If you want to get lucky, GET THEM DRUNK!

If you want something you can't afford, TAKE IT WITH FORCE!

 

as a 12 year old, it was hardwarming for me to learn the good old traditional values of life from here. To bad she passed away to early... like my uncle always said: In and out in 5 minutes, we'll get the rest in another bank.

To bad her watch broke that very same day...

tmosley's picture

Are you Blythe's grandson, by any chance?

doomandbloom's picture

Invasion is so old school....the latest hi tech trend is 'revolution'..

a)Activate sleeper  cells. b)Garner some local antisocials. c)Send media in for a completely one sided coverage.d) Make a hue and cry about human rights e) Get UN to approve an invasion

If China and Iran continue like this....expect them to be revolutionised..( google has already started making noises today)

CH1's picture

How much does it cost to buy one futures contract for silver and hold for delivery?

Please give precise figures if possible.

Thx.

Azannoth's picture

I think it's in the hundreds of thousands

CPL's picture

All you need to do is buy physical silver.  There is no hedge in paper.  At least if physical tanks you still have silver in your hand.

Sudden Debt's picture

No hedge in paper silver? :)

 

I just rebought these warrants today :)

 

http://rss.boursorama.com/cours.phtml?symbole=1rPL033B

2012 38 1/4

 

EscapeKey's picture

5,000 oz x 7.5% margin = 5,000 x 36 * 0.075 = around $13k for the initial contract, but your margin requirement might need an occasional topup...

Of course, final settlement means paying the balance, so total cost = 5,000 x 36 = $180k.

The Grip's picture

Whoever junked this gets an extra day as the Bernank's tapeworm in the next life.

Banjo's picture

I really hope this was junked by accident. It containts nothing but factual and accurate information.

DosZap's picture

Blythe did it, your making her life hell.

Abitdodgie's picture

One contract is 5000 oz , so it is about $175,000

kkam's picture

A spot contract is 5000 oz. I believe the Comex futures contract is the same, so 1 comex contract = 5000 x 36 = 180,000 dollars. Note, most futures contracts are bought on margin.

Richard Head's picture

Has there yet to be one ZH reader who has stood for delivery and documented the process?  I would love to try it, but $180k is outside my means.

tiger7905's picture

Interesting story on taking delivery.

http://goldandsilverlinings.com/?p=169

I use sprottmoney for purchases, they only sell what they have. Yes, we should be realistic that Sprott is playing both sides of the fence but at least you can get supply.
(FYI: I have no association with Sprottmoney, other than their office is conveniently located 3 blocks from mine.)

John McCloy's picture

  I found that the best example in unlocking a mind and getting them to understand how dangerous the Fed and money printing has been for our economic health is to use the silver quarter analogy. 

  I ask them if they are aware that a quarter pre 64 is 90% silver. Most are not. I ask them if they are aware that because silver is 36 an oz that this quarter has a melt value north of $6.00. Always wakes them up and 100% had no idea.

nevadan's picture

For those old enough to remember 25c gasoline it always raises eyebrows to point out that in terms of silver the price of gas is now lower than it was in the early 60's.

sudzee's picture

The Royal Canadian Mint issued 1/4 oz silver coins with a face value of $20.00. The issue was sold out in a few days. The face value of the 1/4 oz coin may be a reflection of the anticipated future price of silver of $80.00 per ounce as accessing supply of bullion is becoming difficult at this time.

luk427's picture

The Canadian mint is having trouble obtaining silver. With these coins they are getting min. $80.00/oz instead of $34-36+ prem./oz for 1oz maple. They are making way more money with an oz of silver. Melt value on this new coin is $9.00. It will protect your down side but but on melt value you won't start making money until silver is at over $80.00 /oz. Buy Maples.  ( $20.00 coin only contains 1/4 oz silver.)

kadriana123's picture

I see Apmex seems out of a lot of Canadian coins and won't be getting more in for a coupleweeks. They have a fute date next to their American Eagles too.

Temporis's picture

"This new Canadian silver commemorative coin is legal tender with a value of $20. It is available for the official price of only $20. You simply exchange $20 from your wallet for a $20 coin of pure 99.99% silver."

http://www.mint.ca/store/product/product_exchange.jsp?itemId=prod1040001...

 

Sounds like they are preping for silver to hit $80 an oz.

Life of Illusion's picture

 

 

Not to long ago Central Banks told us they would sell their gold and silver..

HAHAHA

 

Zero Govt's picture

Buy Silver in, US Dollars out (rid of) ...what's not to like for the Chinese?

True.North's picture

Thank you Benlzebub, dark prince of gluttony