Chinese Gold Imports Through August Surpass Total ECB Holdings, Imports From Australia Surge 900%

Tyler Durden's picture

First it was more than the UK. Then more than Portugal. Then a month ago we said that as of September, "it is now safe to say that in 2012 alone China has imported more gold than the ECB's entire official 502.1 tons of holdings." Sure enough, according to the latest release from the Hong Kong Census and Statistics Department, through the end of August, China had imported a whopping gross 512 tons of gold, 10 tons more than the latest official ECB gold holdings. We can now safely say that as of today, China will have imported more gold than the 11th largest official holder of gold, India, with 558 tons.

Yet despite importing more gold than the sovereign holdings of virtually all official entities, save for ten, importing more gold in July than in any month in 2012 except for April, importing more gold in 8 months in 2012 than all of 2011, and importing four times as much between January and July than as much as in the same period last year, here is MarketWatch with its brilliant conclusion that the 'plunge' in gold imports in August can only be indicative of the end of the Chinese gold market, and the second coming of infinitely dilutable fiat.

“China’s near-term appetite for gold appears to be waning as bullion imports from Hong Kong slow,” HSBC analysts said in a note following the data release last week.

 

Anecdotal evidence also pointed to the cooling trend, with one Hong Kong bullion dealer saying the word from mainland clients was that gold inventories are saturated.

 

“What we are hearing from our customers is that they were buying gold rapidly over the last couple of years, but they would now see some of their stocks sold off before they rebuild some of their inventories,” Scotia Mocatta managing director Sunil Kashyap said in Hong Kong.

There is spin, and there is of course, reality. We urge readers to identify where on the chart below is the evidence of Chinese disillusionment with gold:

Furthermore, with the status quo cartel in desperate need of China stepping up its monetary easing, and jumping right into the race to debase, which is absolutely critical to halt the plunge in tech company revenues and earnings, any interim slowdown in purchases is merely a springboard for even more purchase in the future once inflation does come back to China with a bang.

Incidentally, one thing that MarketWatch completely forgot about is that in Q4 Chinese gold purchasing, all monetary else equal, is set to spike in Q4. From the South China Seas:

Fung expects gold imports on the mainland to stay soft this month as prices have continued to remain high.

 

"However, gold consumption is likely to climb again in the fourth quarter, a traditionally peak season when Chinese people buy gold jewellery for weddings and presents," he added.

All rhetoric aside, one unspinnable aftereffect of China's relentless appetite for gold comes from a different place, namely Australia, where gold just surpassed coal as the second most valuable export to China. From Bullionstreet:

Australia's gold sales to China hit $4.1 billion in the first eight months of this year as it surged by a whopping 900 percent.

 

According to Australian Bureau of Statistics, the yellow metal became the second most valuable physical export to China, surpassing coal and only behind iron ore.

 

The unprecedented jump in gold sales, along with continued acceleration of export revenues for other commodities led by coal, up 80 per cent to $4bn, caused total exports to China to rise by 10.7 per cent for the year to August, the Bureau said.

 

Perth Mint supplied most of the gold to China through a variety of banks.

 

Analysts said Chinese buyers are hoarding the precious metal amid a slowing economy, property-buying restrictions and uncertain financial markets as its central bank increases its holdings.

 

China's foreign currency reserves of gold are low and its move to build them up will provide an important base demand for gold, they added.

In other words, take the chart above, showing only Chinese imports through HK, and add tens if not hundreds more tons of gold entering the country from other underreported export channels such as Australia. One thing is certain: China no longer has any interest in buying additional US Treasurys. What it does have an interest in is up to readers to decide.

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Beam Me Up Scotty's picture

If you can't eat it, why are they importing so much of it?

 

Gold, BITCHEZ!!

economics9698's picture

The king got tired of paper and now wants his gold.

JonNadler's picture

Marketwatch, the only possible farce bigger than Kitco.com

DoChenRollingBearing's picture

NO ONE is a bigger farce than kitco.com...

:)

fonzannoon's picture

cnbc is the absolute worst piece of shit. it's a shit propoganda machine.

markmotive's picture

To build an empire you need hard resources and people. China has the people...now it is securing the resources.

http://www.planbeconomics.com/2012/10/09/imperialism-and-china/

Shelby Moore III's picture

Every time I read this delusion that so many people have about China, I just wonder how can they allow themselves to be so ignorantly uninformed.

Even when you try to explain to them, they resist the information.

 

Empires are built either by profit, or by military conquest and enslavement (the latter cases are not sustainable as history has shown).

You really don't understand that China is a ponzi system that has been sustaining low or negative profit margin industry by stealing from the productivity of its citizens to subsidize monopolies in uneconomic activity:

http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance...

For the short-term you are mesmerized by the nominal increases in hard resource effects, because you are mathematically and logically blind (for what ever reason, could be laziness, could be lack of IQ, could be stubborness or self-confirmation bias, etc):

http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#WherestheBeef?

 

You really want to believe it is as simple as buying gold don't you. Sorry life isn't that simple. But you can pretend it is, just click downvote. The upvote will come too late when "Oh shit, that Shelby guy was correct" moment comes.

LongBalls's picture

All I know is that they are buying a crap load of gold and little treasuries. I also know they are not doing it because they want to make sure we are the economic powerhouse of the world.

AllWorkedUp's picture

So when are they going to announce a gold-backed Yuan?

That will be the end of the USD.

Monedas's picture

They may be totally aware their economy is at risk .... and are buying "insurance" just like all us good old boy gold bugs ?  Even many upper echelon black people are hoarding like crazy !

cwwang's picture

Even if they back their YUAN with Gold, Platinum, Diamond or whatever, there will still be a credibility issue because no one trusts Central Government (China's).  Not even their own citizen or neighboring country.    

Shelby Moore III's picture

Have they imported 36,000 tonnes? That would be 1.2 billion oz, and thus one oz per capita. I don't think so. Maybe they are at 10,000 tonnes maximum, more likely half that.

And more importantly who is getting (controlling) that gold? Not the 800 million working class, they can barely afford to survive:

http://www.youtube.com/watch?v=pngdQo205fM#t=300s

Even the educated graduates can barely make it (and millions of them no job):

http://www.youtube.com/watch?v=vQDH7N-aTLA

The middle class is blowing their savings on the real estate bubble, owning 2 and 3 condos, because it is a status symbol.

So who do you think is going to benefit from that gold. Please read my other comments on this article, as I have explained it is not the people of China who are getting any benefit from that gold importation.

There is something much more sinister going on. And you can start by coming to the realization that the same powers that control the finance in the west, also control it in the east. Different shapes, same smell.

fockewulf190's picture

What is sinister is the entire worlds' financial system is undermined by a 600+ trillion dollar derivatives time bomb that is getting ever closer to blowing sky high. When it does, and it certainly will, the great reset will begin, and gold and silver will be the default monetary currency...yet again. Fiat currencys worldwide will disintergrate. The Chinese are merely positioning themselves to be in the best financial situation possible post-great reset and will then take the lead and the power.

Remember, China has a long history of facing national crisis and surviving, even if tens of millions of people die. The gold may not be enough to save everyone, but it will sustain a vast majority of their population through the great reset.

At least they have some kind of a plan for the future and are pursuing it with gusto. The western world on the other hand, refuses to aknowledge that the ponzi game is rapidly coming to an end, and is heading towards the second dark ages.

Shelby Moore III's picture

But you have not explained how that gold will benefit the masses of China, when they don't hold it, and so far they have been suppressed and stolen from by their leaders via the Yuan peg.

But you know what? Fuck it. You are too stupid to grasp the simple concepts I keep pointing out over and over again.

You fall back to the same erroneous point over and over again.

paintman's picture

The Chinese government is accumulating their domestically stolen wealth today, at historically low prices due to the decline of fiat money values.  They will use it to purchase the domestically stolen production of the other governments of the world, once fiat money approaches its true value.  It will be remembered as the greatest hedge in human history.

BooMushroom's picture

Maybe they just decided that gold was a better investment than USTs.

Which makes sense, with real rates of return on treasuries below zero.

Freewheelin Franklin's picture

Every time I read this delusion that so many people have about China, I just wonder how can they allow themselves to be so ignorantly uninformed.

 

Right. Now take this story, and add it to this one coming from the IMF, and you might realize that it is not a delusion. It's official, the US and EU are Banana Republics.

http://www.telegraph.co.uk/finance/comment/9623863/IMFs-epic-plan-to-con...

daedon's picture

 

The Chinese challenged British capitalism centuries ago and lost.  They remember and they are very patient.  For decades they have been building up their economy slowly and quietly.  They don't intend on loosing another Opium War and their central government can't be bought off like the western style democracies conceived to be controlled by an elite few. Are you sure that it is not you who is mesmerized ?

 

JonNadler's picture

@ DoChen

Si mi amigo tiene razon, I was just using hyperbole, he he of course Kitco takes the prize

conork's picture

Considering I've bought physical from this shower, would you care to elaborate please?

ArrestBobRubin's picture

I agree with the sentiment you express, but might you be overlooking the Fed or the 2 "political parties"?

 

urbanelf's picture

I can't post Chinese characters, apparently.

vast-dom's picture

MarketWatch is a joke! And that kind of joke keeps gold prices down which in turn aides China.

 

MarketWatch idiocy randomly commented upon, just for the hell of it in most simplistic terms:

http://vastdom.blogspot.com

 

An interesting companion piece to the above: 

Ron Paul Sound Currency Message is Resonating With Worldwide Leaders, Including China

http://www.policymic.com/articles/16690/ron-paul-sound-currency-message-...

fonzannoon's picture

looks like we will be in the 1600's by open

Pegasus Muse's picture

Reality Check The fiat Dollar is the real reason for high gas prices

Ben takes a look at how high gas prices are actually the result of our declining currency 02-29-2012

https://www.youtube.com/watch?v=Cdd4selSYE0&feature=autoplay&list=PLfdRv4mkXBsI2hQMAyDoFWQGkBKkG

 

=============

Of course if CPI included the price of energy & food, Bernanke’s money printing would be constrained by the Real World prices.  That just won’t do if your mission is to keep a Ponzi Banking System afloat with freshly printed dollars and provide unlimited Bernanke Bucks to an out-of-control government intent on deficit spending its way to bankruptcy.

TrillionDollarBoner's picture

All well and good, but that's a slightly misleading projection in that it makes consumption look like it's going up and up even though it peaked in April. 

If this graph was submitted to a peer-review journal, the reviewer would tell you to draw a normal histogram (each month starting at zero) so that the varying monthly totals could be more easily compared. Total quantity to date could easily be given separately.

Doesn't diminish the fact that China is buying a shitload of physical gold, as would anyone in their right minds at this stage (i.e. the 'awareness phase')!

knukles's picture

"If this graph was submitted to a peer-review journal, the reviewer would tell you to draw a normal histogram (each month starting at zero) so that the varying monthly totals could be more easily compared"

         Unless of course it was peer reviewed by the IPCC and then it'd show a more dramatic rise in the later stages.

TrillionDollarBoner's picture

"Unless of course it was peer reviewed by the IPCC and then it'd show a more dramatic rise in the later stages."

Gave you a greenie for that one.

And there are a few Economics PhDs and Bureaus of Misinformation that could probably get you a strongly declining hockeystick out of the same data.

DosZap's picture

My $$$$ is on China being SECOND only to India in total reserves.

India's peoples own 22k Tons,(not their banks), and China IMHO is #2 already.

FAR surpassed the 8100 tons the US is (supposed to have).

The top 10 chart is hogwash.

LawsofPhysics's picture

Correct.  However, in order for the state or the government to actually get the reserve status, they will have to take it from the people.  Good luck with that.  In China, maybe, India is another story altogether.

DoChenRollingBearing's picture

At the end of it, all that really matters is how much gold we EACH have.  Take from the Chinese people and/or the state there buys a lot?  Sure!  You are also correct re India (and the USA): Molon Labe!

Manthong's picture

How much of the barbarous relic can you fit into the hem of one of these?

cynicalskeptic's picture

Just a thought -

A large number of people in India and China keep their savings in the form of gold.  In contrast most people in the US are carrying large amounts of DEBT while those that actually have any savings keep theirs in the form of bank deposits denominated in $US or bonds payable in $US or stocks of US companies

 

In a world of ever devaluing fiat, what's the endgame?   Who will be able to buy ANYTHING when values of currencies have imploded - those holding gold or those holding paper dollars, or Euros or.......  The Indian or Chinese ciizen holding gold will still be able to buy things from anyone while the average US citizen will be unable to get more credit to buy anything and those with savings will find their $US of limited value in a world market flooded with them.  

In such a scenario, who survives and prospers?   Does the US believe it can FORCE others to sell it goods at the point of a gun?  Can you FORCE other nations to accept paper $US?  

fonzannoon's picture

your last question is asked as if we are not doing it already...

Nage42's picture

How much have you delt with India?  All you need to do is declare that you'll buy it at 10% over spot and next year you'll deduct their sales amount as an offset vs. their taxation ammount...

OK, I'm not sure about the North, but there's no Southie that could resist that much: "Oh my goodness, oh my holy cow! What an completely incredible deal that you are to be giving me!!!!11!!one!  *bobble* *bobble*"  There was never so "weak" a hand as a South Indian who thought he could make a buck on the quick.

Cause they'd be thinking they'd be able to buy it back on the market next year and take the profit... *fail!*

 

P.S.  I work in IT and have lots of Indian friends, and as individuals, they are beautiful and caring people, but as an aggregate, there is a lemming factor that is second only to the USSA.

 

 

 

HungryPorkChop's picture

Here's a wild guess:  China is going around the dollar and allowing countries to use the Yuan instead of the U.S. Dollar to purchase oil (see link below).

Now with all this gold, their next goal is probably to implement some type of gold backed currency. They're attacking the U.S. Dollar as the gobal reserve currency is my take on this situation. 

http://www.examiner.com/article/dollar-no-longer-primary-oil-currency-as...

Shelby Moore III's picture

And who benefits from this? Certainly not China's people, as I explained in my numerous other comments on this page.

The benefactors are the vested elite and the passive capitalist kings who run the hard resource world (and control the government in every country in the world). I don't know why people think China isn't controlled when in fact the communists rose with the financial help of the bankers. The bankers in fact have promoted and planned everything that is happening to and in China.

Why do you think Kissinger, Nixon, and later Rothschild had been going over there for meeting? This was prepared a long time ago, to impoverish China and then use it as the leverage to get the new world order structured.

It is the same model they always use. They bribe the insiders and let them rape their own people, in exchange for doing the macro-economic policies the bankers want.

Read The Economic Hitman by Perkins. He explains how the global system works.

BooMushroom's picture

The vested elite are ALWAYS the benefactors. I don't know why you keep saying "it's not helping the average Chinese guy" like we give a fuck. Every country has its ruling elite, and to those of us in the USA who are not a part of it, it doesn't matter whether China's rise benefits the 1% or the 53%, it will be bad for the average American, either way.

BTW, I'm not disagreeing with your assertion, just it's relevance to the discussion.

Shelby Moore III's picture

Because if you think gold is your savoir, you are wrong, it is the way the elite are going to enslave the middle class in every country. China won't be this huge beacon of prosperity that will save the world.

You really think if the elite back the digital currencies with gold (no more paper, no way to trade gold for money without being tracked), that they are going to not have a plan to mop up all the other things that you could physically do with gold?

They have a map of the usa in which almost of all of it will be declared bio-reserve and you won't be able to live there. You will live in the city and spend their money, or you will "give up my gun from my cold dead hand".

lasvegaspersona's picture

I am a little confused. China has trillions of dollars of reserves. If it wanted a bunch of gold why not just buy it? They could easily have 20% of the entire worlds known above ground gold. One must suspect that they are trying not only to buy but to buy at a low price. What this says is: the worlds gold supply is SO TIGHT that to take a few tons of the REAL STUFF off the market would cause prices to sky rocket. 

MY advice...get you some NOW!!

DoChenRollingBearing's picture

+ 1

Yes, get it while it is STILL cheap!

Freegolder's picture

@LVP

You wrote:

'the worlds gold supply is SO TIGHT that to take a few tons of the REAL STUFF off the market would cause prices to sky rocket.'

 

Can you not read? China has imported 512 tons of the stuff through HK alone up to August 2012, that's 42 tons every month. Hardly a sign of a tight supply. Plus it is getting load from Australia too. My gold dealer tells me the refiners have it stacked up, supplies have never been so large.

No doubt you expect tight supply to cause the paper market to break, like that other dumbass did back in 1998. You live in your own sad little dream of what the world is like it seems.

Jeez, there's loads of gold floating around out there for anyone that wants it, even the giants like China can just keep hoovering it up.

My advice....get your head out of wherever it is stuck.

cynicalskeptic's picture

Might want to check the vaults in London and NY and see how much is left there - and how many owners there are for each bar that's left.

 

BooMushroom's picture

You think those "cash for gold" stores are a US only thing?

They're popular the world over! They've actually managed to get all the gold out of Portugal, and started closing up shop as their work is done.

http://www.zerohedge.com/news/portuguese-run-out-gold-sell