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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wstrub's picture

Perhaps it is the US buying gold to cover their shorts and making it look like it's China...............things are NEVER as they seem.


Elmer Fudd's picture

So I should start an ultrasound businsess in HK to look for tungsten?

Bastiat009's picture

Bullish news, falling price ... classic gold market for years.

But let's not forget, recovery is on (even if you can't feel it), Greece has been saved, Spain is doing well and the euro will challenge the mighty US$.

orangegeek's picture

The Chinese want more gold to pay for building their empty cities.


Yep - the communists have outsmarted us all.  The communists are so smart.  Just as the USSR - they still around?

DowTheorist's picture

Is China buying GLD or some different gold "flavor"?


For the long-term investor buying gold bullion and have it stored in a certified vault is an alternative not to be overlooked.

Coins are ok for a small commitment. However, for those of greater net worth, it would be suicidal to store big chunks of wealth at home.

Gold bullion has two distinct advantages for the investor in size: It is not expensive as storage costs don't exceed 0.2% a year (which is cheaper than the expense ratio of GLD), and it provides an additional layer of safety.

More on the importance of holding physical gold versus GLD and the time frame where each form of holding gold belongs, here:

dadichris's picture

Most of the comments here frame these events in terms of national self interest (i.e. China vs Europe vs US).  I see it more as Private Bankers vs Average Citizens, in which case consolidation of power, undermining individual freedom, and starting wars is the real goal.

Fishhawk's picture

Shelby, you are a new type of troll on ZH, one who is here apparently only for ego gratification (although perhaps there are some others here who also comment for that reason).  By daring anyone to challenge your immense intellect, you have moved the discussion from the point of the article to some point nearer to your blog/opus.  While the comments section is free form, most folks try to include some reference to the article.  The article merely states that the Chinese (govt? mafia? citizenry? cronies?) are accumulating gold at a prodigious pace.  Knowing the cartel's antics in gold price suppression (which does not imply that we know the cartel's motives), one wonders what the US end game is, as the current situation involves a huge transfer of wealth (read: claim on resources) to the East.  So the cartel, led by JPMorgan, the wet works team for the US Fed, is assisting the Chinese 'players' (whoever is benefitting, now or in the future) in looting the wealth of the West, which can only result in a huge downsizing of life style in the US.  This is certainly consistent with Obummer's strategy (Cloward-Piven?), which may be why he was elected.  But the folks who elected him are the same economically useless eaters you identify as not being knowledge workers.  This is surely the real problem of the way our society worldwide is organized, or has failed to be organized, as it is based on supporting the majority of the population in economically meaningless activities, which could be more economically performed by robots, if a sufficiently cheap energy source could be found to power the robots.  Then we would be ready to prove that silicon based life forms are superior to carbon based forms, and we could do away with the excess population.  Is that the end game of your knowledge based civilization?