China Buys North Korea's Gold Reserves As South Korea Increased Gold Reserves By 30%

Tyler Durden's picture

From GoldCore Gold Bullion

China Buys North Korea Gold Reserves As South Korea Increased Gold Reserves By 30%; Paraguay Buys First Time

Today’s AM fix was USD 1,763.75, EUR 1,369.80, and GBP 1,089.07 per ounce.
Yesterday’s AM fix was USD 1,766.75, EUR 1,369.36 and GBP 1,088.37 per ounce.

Silver is trading at $33.79/oz, €26.41/oz and £20.99/oz. Platinum is trading at $1,630.00/oz, palladium at $627.10/oz and rhodium at $1,075/oz.

Gold fell $3.10 or 0.18% in New York yesterday and closed at $1,761.40. Silver rose to $34.47 in early New York trade then fell off and finished with a loss of 0.71%.

Gold continues to eke out gradual gains in all currencies. It looks set for the best quarterly gain in more than two years, as central banks and investors diversify into gold to hedge against the prospect of weaker currencies and slowing growth.

Euro gold hovering near record highs at €1,375/oz shows the eurozone crisis is far from over and is indeed set to deepen in coming months. 

The overnight joint declaration of Germany, the Netherlands and Finland appears to unravel much of what was agreed at the last European summit in June, when EU leaders attempted to pave the way for the direct recapitalisation of troubled banks, is gold bullish.

The IMF has warned that the financial system remains ‘vulnerable’ and is a work in progress.  

In Spain, protestors fought with police in Madrid as the government embarks on a new phase of austerity measures for the 2013 budget this Thursday.

The SPDR Gold Trust ETF said its holdings had risen to a record high of 1,331.331 tonnes by Sept. 25. 

Unrest in South Africa continues and the fourth largest producer in the world, Goldfields, said that workers reneged on a deal to end a two week strike at its KDC West operation and miners at its Beatrix mine had also downed tools. 

AngloGold Ashanti Ltd., the world’s third-largest gold producer, halted production at all of its South African mines as labor unrest that left at least 46 dead in the past two months continues to spread.

Julius Malema, expelled as youth leader from South Africa’s ruling African National Congress, was granted bail on a charge of money laundering.

Germany's Federal Statistical Office is scheduled to release flash inflation data at 8.00 am ET.

Gold in USD, EUR & GBP – YTD 2012

The IMF reported that various countries continued diversifying into gold in July, some significantly.

South Korean gold reserves rose a sharp 16 tonnes for a 30% increase in total gold reserves.  

Paraguay became the latest central bank to begin diversifying into gold. Their gold reserves rose sharply - from a few thousand ounces to over 8 tonnes.

Desperate North Korea has exported more than 2 tons to gold hungry China over the past year to earn US $100 million. Even in tough times during the Kim Il-sung and Kim Jong-il regimes, North Korea refused to let go of its precious gold reserves.

Chosun media reports that “a mysterious agency known as Room 39, which manages Kim Jong-un's money, and the People's Armed Forces are spearheading exports of gold, said an informed source in China. "They are selling not only gold that was produced since December last year, when Kim Jong-un came to power, but also gold from the country's reserves and bought from its people."

This is a sign of the desperation of the North Korean regime and also signals China’s intent to vastly increase the People’s Bank of China’s gold reserves.

Data on the International Monetary Fund’s website shows Kazakhstan’s assets rose 1.4 tons to 104.4 tons last month, Turkey’s gold reserves gained 6.6 tons to 295.5 tons, Ukraine’s rose 1.9 tons to 34.8 tons.

While the Czech Republic’s bullion assets fell 0.4 ton to 11.8 tons, data shows.

Nations bought 254.2 tons in the first half of 2012 and may add close to 500 tons for the year as a whole, the London-based World Gold Council said earlier this month. 

The trend among central banks to diversify their foreign exchange reserve holdings with gold continues.

This trend is very sustainable considering the still tiny allocations creditor nation’s banks, with massive foreign exchange reserves, have to gold.

Paraguay is a new central bank gold buyer – expect many more central banks to begin increasing their gold reserves in the coming months.

Cross Currency Table – (Bloomberg)

(Bloomberg) -- Barclays Says Gold Will Outperform Other Precious Metals From QE
Gold will outperform other precious metals as quantitative easing takes effect, Barclays Plc said.

Aluminum is the weakest industrial metal based on fundamentals, and China’s metals stockpiles are modest and falling, Barclays said in a report distributed to reporters today in London. Prospects are high for a very large price spike in oil due to low spare capacity and potential for problems in the Middle East, it said.

‘"QE is not a rising tide that will take all boats,’’ Paul Horsnell, head of commodity research at Barclays, told reporters today. “It is good for gold. Gold will move from one of the weakest commodities this year to one of the best performers over the next few quarters.”

(Bloomberg) -- Cash Gold in Shanghai Poised for Best Quarter in Five Years
Cash gold of 99.99 percent purity on the Shanghai Gold Exchange was little changed at 358.35 yuan a gram at 9:01 a.m. Singapore time, up 12 percent this quarter and set for the biggest such advance since the three months to September 2007. Volumes for the benchmark contract on the country’s largest cash bullion market were 3,267 kilograms yesterday, up from 2,915 kilograms on Sept. 21.

Gold for December delivery fell as much as 0.3 percent to 359.97 yuan a gram ($1,775.18 an ounce) on the Shanghai Futures Exchange, and was last at 360.33 yuan. The metal has risen 11 percent since the end of June, poised for its best quarterly showing since December 2009.

December-delivery silver declined for a third day, falling as much as 0.6 percent to 7,118 yuan per kilogram, before trading at 7,135 yuan.

(Bloomberg) -- Explosive’ Gold ETP Demand Driving Price Rally, Saxo Bank Says
An “explosive” gain in demand for gold in exchange-traded products is helping to drive the metal’s price rally, Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen, said on the Bloomberg LiveINSIGHTS precious metals web conference today.

“Hedge funds have only just begun to get involved, having waited for momentum to return, leaving them plenty of room to increase positions.”

(Bloomberg) -- IShares Silver Trust Holdings Unchanged at 10,016 Metric Tons
Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 10,015.99 metric tons as of Sept. 25, according to figures on the company’s website.


                          Sept. 25   Sept. 24   Sept. 21   Sept. 20   Sept. 19   Sept. 18

                                   2012       2012       2012       2012       2012       2012


Million Ounces  322.022    322.022    319.600    319.600    317.759    316.402

 Daily change         0         2,422,030          0           1,840,792  1,356,384          0


Metric tons         10,015.99  10,015.99   9,940.66   9,940.66   9,883.40   9,841.22

 Daily change             0.00         75.33          0.00          57.26          42.18       0.00

NOTE: Ounces are troy ounces.

(Bloomberg) -- Gold Prices May Climb to $2,000 Next Year, Commerzbank Says
Gold may rise to $2,000 an ounce next year, said Eugen Weinberg, the head of commodities research at Commerzbank AG in Frankfurt.

“I am bullish on gold as there are not many alternative investments,” Wienberg said on the Bloomberg LiveINSIGHTS precious metals web conference today. “There are too many economic risks today, and the risks are not yet priced in, so I see demand for gold rising.”


Gold Poised for Best Quarter Since 2010 on Investor, Bank Demand - Bloomberg

Gold hits euro record high – The Financial Times

Gold steady; euro zone concerns weigh - Reuters

Gold Fields strike spreads to Beatrix - Reuters



Martin Wolf: Germany Should Consider Exit – The Financial Times

Why Germany Is Going to Exit the Eurozone – Financial Sense

Swiss central bank fuels Europe's North-South debt crisis – The Telegraph

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GetZeeGold's picture



The Huns.....have arrived.


I offered them a magazine......they said "no thanks. we'll just wait"


Ruffcut's picture

I hope they had enuff time to fill with tungston.

GetZeeGold's picture



Yeah.....that's kinda why they're here.


Put it this way.....they don't look happy.


ChanceIs's picture

"Fight Club" full video is now up (for free) on YouTube:

What a hoot.  Was up until 3:00 last night.  It is all so clear now.

JohnKozac's picture



I have insomnia so thanks for the link!

Dr. No's picture

Just cry.  If you need help crying, just look at the constitution.

GetZeeGold's picture



There's no crying in baseball....or Fightclub.


It's just the way it's always been.....not even sure if it's even a rule.


JohnKozac's picture

Wipe that smile off yoru face!


New Jersey bans smiles on driver's licenses to safeguard facial recognition


Hello, is George Orwell home?




aerojet's picture

Facial recognition technology is so fucking stupid--you can add just a couple of dinosaur stickers to your cheek and the damn thing doesn't know who you are.  It's too easy to defeat and it has a 10% error rate even when you're not trying to fuck with it.  Totally worthless except for use by fascists as a pretext ("the computer flagged you as a person of interest"--which is what it does whenever they press a certain key).  It's just like the old "well, the dog alerted, so we have PC to search your car" bit.  It's all bullshit.

Overfed's picture

The solution is simple. People need to start destroying cameras, and refuse to stop. Tell the gov't to shove Trapwire up it's collective ass.

Dr. No's picture

Have you not seen the movie?

And suddenly, I felt nothing.  I couldn't cry.  So, once again, I could not sleep.

LULZBank's picture


It is all so clear now.

What is all so clear now?

ChanceIs's picture

The counter-cultural ethos underpinning this board has become clear.  I had not seen the movie before and don't want to spoil it.  But...the anti-consumerisim...and then blowing up the credit card companies.  And this was long before that guy started painting on canvas, flaming Citi branch offices.  Or was it Wells Fargo?

See the movie quick, before the copyright Nazis at YouTube pull it.

PS:  You get to meet Tyler Durden and Marla Singer.

PPS:  I just broke the first rule of Fight Club.

aerojet's picture

Honestly, you can get a used DVD copy of it off of Amazon for like $3 or watch it streaming from Amazon for about the same price.

ChanceIs's picture

I didn't know that Amazon streamed.  I made a buck or two shorting NFLX figuring there would be plenty of competition.  Didn't make the ride from $300 down to $80 at all.  Is AAPL the next NFLX?  AAPL has good stuff, but tha doesn't mean the sheep haven't been in there en masse.  Verizon even streams.

"Selling rich ladies there fat asses back."  What a scream.

Better than "Repo Man."

fuu's picture

And the second rule.

ChanceIs's picture

Never talk about Fight Club.

Ooooops.  I just broke the first and the second rules.

Gully Foyle's picture

Why assume that selling Gold is a sign of desperation?

It makes more sense as a tithe to Chinese hegemony.

China spreads that big umbrella to protect Asia from the western economic rain.


GetZeeGold's picture



Why assume that selling Gold is a sign of desperation?


It's in the manual......somewhere.


mjcOH1's picture

"Why assume that selling Gold is a sign of desperation?"


Because selling paper you can devalue at the stroke of a pen by printing more is a sign of strength.   Sort of indicates you have nothing if you can't sell bullshit and have to sell something that can't easily be replaced.

redd_green's picture

Vastly increase?  You GOTTA be kidding us.  How much gold does North Korea have, 40.00 worth?  Please. 

GetZeeGold's picture



How much gold does North Korea have


Less than yesterday......but that's not saying much.


youngman's picture

I bet they....or I should say he has a lot of gold...most dictators love shows themselves how great they are....and they can always try to steal it if things go south...

mjcOH1's picture

You can bet that the Golden Crapper will be the last of the People's Gold to be sold.

Gully Foyle's picture

North Korea Mining and Metal Processing

The economy depends to a considerable degree on the extraction of its many mineral resources for fuels, industrial raw materials, and metal processing as well as for exports. Anthracite coal, with estimated reserves of 1.8 billion tons, is the most abundant of the country's mineral resources. It is produced in large quantity for both domestic consumption and export. Coal mines, largely concentrated in South P'yngan Province, produced 68 million tons and 22 million tons, respectively, of anthracite and the less abundant lignite coal in 1990. Despite a fairly steady increase in the 1980s, coal production has not been able to catch up with rising demand. This situation has created a persistent energy shortage because the country relies on coal as its main energy source and lacks any reserves of oil or gas.

The lagging coal industry remains a major bottleneck. The aging of existing mining equipment and facilities, the inefficiency that arises from the increasing need to mine deeper seams, and a lack of modern, efficient equipment are the primary reasons for the production lag in extractive industries. The persistence of these problems prompted Kim Il Sung to stress the importance of developing the mining and power industries and rail transport even in his 1992 New Year's address--the same theme he has repeated annually in his New Year's address for at least the previous fifteen years.

Because of the lack of domestic reserves, the country continues to rely on foreign sources for bituminous coal. Toward the end of the 1980s, China was the chief source of coking coal, followed by the Soviet Union.

The Anju District coal mining complex is the leading coal producer (see fig. 6). A large-scale open-pit mine was being developed in the Anju District in 1990. High-quality anthracite deposits are located in the Paegam District of Yanggang Province, and have estimated reserves of at least 1 million tons. Coal deposits amounting to 10 million tons also exist in Chunbi, T'- gol, and Kangdong in Kangdong District.

With estimated reserves of 400 million tons, iron ore continues to be important for domestic industry and is a major source of foreign exchange. According to Western estimates, annual iron ore output increased from 8 million tons in 1985 to 10 million tons in 1990. In the 1980s, new mines were added at Tksng and Shae-ri; they supplemented older mines at Musan, nryul, Tkch'n, Chaeryng, and Hasng, all of which received considerable state investment. The expansion projects started in early 1988 to increase the production capacity of the Musan Mining Complex to 10 millions tons per year were completed in 1989. The long-term annual output target, however, is 15 million tons. The Chngp'yng Mine in South Hamgyng Province was commissioned to produce ores in February 1991.

North Korea possesses the largest and some of the best quality magnesite deposits in the world--an estimated 490 million tons. The mining of magnesite is important for the domestic industrial ceramics industry and for exports. Magnesite mines are concentrated in the Tanch'n District in South Hamgyng Province; annual output of magnesite in 1990 was estimated at 1.5 million tons. With the completion of expansion projects of the Tanch'n Magnesia Plant and the construction of the Unsng Crushing and Screening Plant in 1987, the production capacity of magnesia increased to 2 million tons annually. The government also began efforts to expand output capacity of magnesia in the Taehng District toward the end of the 1980s.

Other important minerals are lead, zinc, tungsten, mercury, copper, phosphate, gold, silver, and sulfur; manganese, graphite, apatite, fluorite, barite, limestone, and talc also are found in great supply. Zinc and lead ingots, among the leading exports, are produced at domestic smelting plants in Tanch'n, Namp'o, Haeju, and Munpyng. With a capacity of 15 million tons, the K mdk Mining Complex in South Hamgyng Province is one of the leading producers. An estimated 200,000 tons of high-grade electrolytic zinc and an estimated 80,000 tons of lead were produced in 1990.

A joint venture project to redevelop the Unsan Gold Mine was unveiled in March 1987. The successful reexploitation of the mine, originally opened by a United States firm in 1896, with deposits estimated at more than 1,000 tons, could make it one of the world's major gold mines.

Building materials, such as the cement used in almost every construction project, are manufactured in large as well as smallscale local industrial plants. Annual cement output was estimated at 11.77 million tons and 12.02 millon tons, respectively, in 1989 and 1990.

Data as of June 1993

schatzi's picture

Holy fuck, what just happened to the gold price? Did Portugal finally decide to dump all its reserves on the market at once?

LULZBank's picture

Nothing so serious really... amwaiting for 50+ USD/Oz drop in a day, then we're talking.

Debtonation's picture

Don't worry, that's just Ben trying to get rid of whats left of Fort Knox.  It's go big or go home if gold isn't money.

Peter Pan's picture

Don't worry about gold. After 5000 years of proven track record, you either have it or you don't and you either understand it or you don't.

It's really that simple.

Gully Foyle's picture

Peter Pan

Now I don't know, but I been told it's hard to run with the weight of gold.
Other hand I have heard it said, it's just as hard with the weight of lead.

Peter Pan's picture

Then I recommend lead in your case. That should minimise the chances of anyone chasing after you.

aerojet's picture

Maybe so, but I'm still not buying at the top of any bubble if I can help it.

Quinvarius's picture

Taking out the stops before a run is a time honored tradition.  This looks like the fifth time they have done it since the move up began.

kaiserhoff's picture

Back when we had regulators, this shit was illegal.

ParkAveFlasher's picture

The price has been taking $70-$80 hits like clockwork.  Part of the game.  btfd

Dr. No's picture

What happened to gold price?  massive selling.  people are selling their bars before they are discovered they are filled with Tungsten.

LULZBank's picture

Selling Gold to buy or pay for what?

Peter Pan's picture

If the North Koreans are desparate enought to sell their gold I wonder if they will also be desparate enough to sell an atomic weapon or two.

LawsofPhysics's picture

The Chinese already have plenty.  I think you meant to say, "desparate enough to use an atomic weapon or two."

Peter Pan's picture

I wasn't alluding to a sale of atomic weapons to China. But you are right in being worried about some nation becoming deparate enough to use atomic weapons. After all, the USA dropped not one but two weapons on Japan. I would have thought the Japanese people got the message after the first bomb. Or did America want to show it had stock on hand?

kaiserhoff's picture

Agreed.  The world is full of background noise, right now, but these motherfuckers are moon bat crazy.

LawsofPhysics's picture

No crazier than the central bank fuckers devaluing to infinity.

earnulf's picture

Actually, the Japanese Military refused to give in after the first bomb, call it shock and awe, disbelief or just plain bushido.     The second bomb drove home the reality that the US no longer needed to give the Japanese the option of dying to repel a bloody invasion and the Emperor finally manned up and said "we give up".

My understanding of it is that the US had a third atomic weapon available, but no more after that.   Among the third targets was apparently Tokyo.

In addition, a major typhoon smashed into the assembly port for what would have been the invasion of japan about the same time as planners would have had most of the forces assembled.    Some have likened it to the "divine wind" that smashed the Mongol invasions back in the 1200's.

aerojet's picture

They won't--they would be annihilated and also there is the whole WWIII thing--if the two Koreas go at it, China/Japan would light up, and pretty soon after the whole damn world.  You can't have a regional war of any size anymore, the world is just too intertwined.

darteaus's picture

Already have.  They were the Chinese conduit to the Pakistani nuclear program

NK is the Chinese stooge that gives the Middle Kingdom plausible deniability for their more nefarious deeds.

mjcOH1's picture

More like it gives the US palusible deniability.   We know who's responsible for the bullshit.   But we can conveniently blame North Korea in the congressional hearings and not have to do anything to jeapordize the iShit supply.

RacerX's picture

But gold is so HEAVY. How do they move it around?

Quinvarius's picture

Not to mention:

The gold strike continues.  The predictable results of gold suppression.  Mines cannot afford to operate.

redd_green's picture

Get out there folks and buy your tungsten filled gold bars today! Direct from China, will fool the experts!