China’s Consumption of Gold and Acquisition of Gold Mines Continues

GoldCore's picture


Today’s AM fix was USD 1,429.75, EUR 1,102.52 and GBP 931.19 per ounce.  
Friday’s AM fix was USD 1,449.25, EUR 1,114.12 and GBP 941.62 per ounce. 

Cross Currency Table – (Bloomberg)

Gold fell $12.90 or -0.89% on Friday to $1,443.30/oz and silver finished with a gain of 0.42%. Gold and silver both traded down for the week at -1.76% and -1.25%.

The downward pressure on the gold price emanated from Comex where gold futures were off 1.9%. 

Driving the sentiment was the report that U.S. jobless benefits decreased to their lowest rate since 2007. Philadelphia Fed President Charles Plosser forecasted that day unemployment will drop to 7% by December 2013 and he favours reducing the Fed’s $85 billion monthly bond purchases next month. Plosser however has no vote on Fed policy this year.

While hedge funds are seeing outflows of $20.8 billion from gold funds this year, BlackRock Inc. the world’ biggest money manager is still bullish, reported Bloomberg.

Gold in Dollars, 1 Year – (Bloomberg)

Asian countries are seeing unprecedented demand for the yellow metal after the dip in prices in April.

India imported $7.5 billion of gold bullion in the last month up from $3.1 billion a year earlier. The country’s trade deficit widened 70% with the increase in gold and silver imports.

Gold in Euros, 1 Year – (Bloomberg)

Analysts at Sprott Group highlight that China is using its gold import data to elevate import statistics even though the precious metal should not be classified with imports since they are not used for “goods and services” but rather primarily as investments.

The golden boost to the imports data has led some analysts to conclude that the Chinese manufacturing sector is strong. According to the Bejing Daily Newspaper, Chinese housewives or “aunties” have purchased 300 tons of the yellow metal in the past three weeks amounting in nearly $16 billion.  The impact of the run on physical gold in China may have a significant effect on import statistics.

Recently, China National Gold, a state-owned miner, was in talks to purchase Barrick Gold’s 74% stake in African Barrick, a major gold producer in Tanzania.

Although the deal has been shelved it shows China’s desire to acquire more mines. The Chinese purchased Norton Gold Fields in Australia last year for $240 million and in mid April bid for Kalgoorlie Mining Co.  Even with the price drop the Chinese saw the price for Barrick as too steep.  

China is the world’s largest producer of gold.

Gold down 1 pct to near 2-week low on dollar - Reuters 

Gold Drops for Third Day as Dollar’s Strength Curbs ETP Holdings - Bloomberg

Gold Bears Pull $20.8 Billion as BlackRock Says Buy: Commodities - Bloomberg

Amplats scales back South African job cuts to 6,000 – The Telegraph

India trade deficit jumps over 70% on gold imports – Market Watch


Precious Metals Lose Luster for Investors – Dubai Chronicle

THE BIG FALLACY: Silver Trading More Like A Base Metal - 

Eric Sprott: The Golden Answer To Chinese Import Data – Zero Hedge

African Barrick Gold’s China talks end – The Financial Times

A Top Contender at the Fed Faces Test Over Easy Money – Wall Street Journal

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goBackToSleep's picture

Well at least the US is buying AU and AG instead of subsidizing iCRAP for BENNYfit recipients, oh wait...........

JOYFUL's picture

Barrick is the left hook to JPM's right jab, in the dirty bizness of precious metals manipulation and money laundering.

The Chinks will soon nuff be able to pick up the entire Barrick business for not much more than they offered for the crappy African stake... the lower the POG is pushed by Dimon&co... the worse the valuations on the miners.

These scammers are sooooo busted. And don't think Beijing doesn't know it! There is no China "Bubble" ... it's more like the China "Blob"... and its oozing this way!

Lordflin's picture

So far as I can see China is no different from the rest of the world... Corrupt oligarchies concentrating wealth into a few hands while their society seethes and bubbles beneath them...

So how much longer can we/they paint over with fudged numbers and paper before reality takes hold and the whole thing blows?

silvermail's picture

China is alive and growing at the expense of their labor, but not at the cost of parasitism on the other countries, like for example United States.

Diogenes's picture

The whole thing blows now. Haven't you noticed? Do you think the world is going to pop in 1 second like a firecracker? This sort of collapse takes generations to work out.

RaceToTheBottom's picture

How long?  We have been doing it a fairly long time.  I would expect they will be able to as well.

RaceToTheBottom's picture

"Walk like an Egyptian"  has become "Buy like the Chinese".

DeadFred's picture

I bet the Chinese aren't really 'consuming' the gold, more likely buying, stacking and occasionally just looking at the pretty color. Sounds like a typical Zero Hedge reader.

OpTwoMistic's picture

"The golden boost to the imports data has led some analysts to conclude that the Chinese manufacturing sector is strong."

No. Just preparing for failure of fiat.  The next reserve currency.

fourchan's picture

Massive Buying Drives Gold Market Lower.


thats where we are with free markets now, what a joke.

Bay of Pigs's picture

Indeed. Here is a good article on the fraud ridden ETF's GLD and SLV for our local ZH gold troll James Cole. He loves to cite them as "evidence" of price weakness. LOL.

TradingTroll's picture

Detailed research, a long lost skill.



Zijin's Australia Unit Says Interested in 3 Barrick Gold Mines


Barrick's Australia exit is exactly where in the above article?

new game's picture

west to east, thar she blows.