China Imports Record Amount Of Gold In December On Price Drop

Tyler Durden's picture




 

Back in December, as always happens every year for the past 3, a margin call driven liquidation wave pushed the price of the gold to multi-month lows, providing merely yet another lowball buying opportunity (for which let's all thank John Paulson, again). One buyer who certainly would love to thank whichever marginal seller was liquidating their gold, is none other than China, which as was reported a few hours ago, imported an all time record 114.4 tons of gold in the month of December, or more than all the gold held by the Greek central bank (assuming it hasn't been confiscated by ze Germans or the ECB, or deposited in G-Pap or Venizelos' private HSBC safe in Geneva yet: a very aggressive assumption).

This means that for all of 2012, total China imports of gold have hit a staggering 834.5 tons, double the 431 tons in 2011, and that the PBOC's determination, whose official holdings are still a laughable 1054 tons, when in reality they are likely 3-4 times greater, to convert to a commodity-backed currency the day it decides to become the world's reserves currency, as we predicted back in 2011, is as steadfast as ever. Recall from the December 2009 edition of China Youth Daily, which we reported previously that State Council advisor Ji was saying "that a team of experts from Beijing and Shanghai have set up a "task force" last year to consider growing China's gold reserves. "We suggested that China's gold reserves should reach 6,000 tons in the next 3-5 years and perhaps 10,000 tons in 8-10 years," the paper quoted him."

This was in 2009. It is safe to say that the official (not reported) Chinese gold holdings are now around 4-5,000 tons, or 4x-5x more than the IMF number. 

In the meantime, China's 2012 gross gold imports alone (ignoring its massive internal production, which happens to be the world's largest gold producer), have surpassed all of Japan's official gold holdings, and were just shy of Russia's and Switzerland's total official gold.

More from Bloomberg:

The imports in December compared with 90,764 kilograms in November, and were more than double the 38,650 kilograms a year earlier, according to the data. Net imports, after deducting flows from China to Hong Kong, were 84,687 kilograms in December from 61,787 kilograms a month earlier. China doesn’t publish such data.

 

China was expected to displace India as the world’s biggest gold consumer last year, according forecast in November from the producer-funded World Gold Council. Rising consumption in the country may help to offset concern that the metal’s bull run may be coming to an end as the global economy recovers. Spot gold is little changed so far this year, while the Standard & Poor’s GSCI Index of raw materials has risen 4.4 percent.

 

The increase in gold imports last year “was largely a result of income growth,” Jiang Shu, a senior analyst at Industrial Bank Co. Ltd., said from Shanghai before the data was released. “The Chinese are becoming more wealthy.”

 

Economic growth in China, the world’s largest gold producer, has boosted the country’s consumption of everything from copper to energy and farm commodities. The nation, which snapped a seven-quarter slowdown in the final quarter of last year, is the world’s largest base-metals user, the biggest importer of soybeans and the top crude-oil consumer after the U.S.

 

“We see demand continuing to be robust into 2013,” said Wang Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s biggest listed brokerage. “The economy will recover, albeit slowly, while real interest rates will remain low and central banks will continue to accumulate. These are all bullish for gold.”

And all this with inflation in China still supposedly tame. Just wait until the trillions in new money created in 2013 finally find their way to the Chinese market and send inflation through the roof as happened in early/mid 2011, and when gold exploded. Once the increasingly more affluent Chinese middle class decides to once again lock up its wealth in the form of gold, then and only then, will gold finally cross the so far insurmountable $2000 resistance level.

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Tue, 02/05/2013 - 10:50 | 3216147 GetZeeGold
GetZeeGold's picture

 

 

The story of the young bull and the old bull.

Tue, 02/05/2013 - 10:55 | 3216173 The Juggernaut
The Juggernaut's picture

The Fed Reserve (and its agents) are shorting and China is long.

Tue, 02/05/2013 - 11:21 | 3216234 Landotfree
Landotfree's picture

The author is confused, there is hardly any new money (ie credit what the lemmings use for money) coming online.   Please wake me up when these trillions show up.   

http://www.federalreserve.gov/releases/z1/current/accessible/l1.htm

"Just wait until the trillions in new money created in 2013"

During one quarter in 2007, new credit was coming on at a 4.7T annualized rate, now we are about 1.2T.  In 2009, the system went negative.  

http://2.bp.blogspot.com/--RkLZLRlRi8/UGAGOUg7fNI/AAAAAAAAABs/HHgMlfUYP2...

The system is actually missing about $20T.  The system should have been north of $80T if it were acting as it should to substain itself by the end of 2013, unfortunately or fortunately, that ain't going to happen.   Learn to swim.

Eventually, all the tricks will run their course, the system which requires exponential growth will no longer be supplied the required growth and will top over once again, the amount power needed to sustain the unsustainable will continue to grow.   The system will then start to collapse, at some point, liquidation of the unfunded liabilities on a massive scale.    


Tue, 02/05/2013 - 11:26 | 3216266 BaBaBouy
BaBaBouy's picture

FEDerales Selling All The Paper, And The ASIANS/Chinee Buying Up All The Available Physical (i.e. The Non-Tungsten)...

 

Germany HELLLOOO??? How much of your GOLD Is Already In China ???

Tue, 02/05/2013 - 11:29 | 3216282 Harlequin001
Harlequin001's picture

The bastards who are fucking around with the gold price are basically giving it away for free, or nearly free.

This is wealth that past generations have fought and died for.

Let's hope that they hang for it when the time comes eh...

Tue, 02/05/2013 - 12:16 | 3216448 Mister Ponzi
Mister Ponzi's picture

Gold to $2000? But, but...

"1100 maybe - but 1500 or 2000 is utter nonsense..."

Tue, 02/05/2013 - 12:47 | 3216572 ParkAveFlasher
ParkAveFlasher's picture

Germany HELLLOOO??? How much of your GOLD Is Already In China ???

How does anyone know that that isn't the way Germany wants it?  How does anyone know that there aren't any big German customers with an agent in some South East Asian port?

 

Tue, 02/05/2013 - 13:39 | 3216792 youngman
youngman's picture

We as in the WEST are trying to do the short tem make the fiat look good by holding down the price of gold and silver.....but the Chinese and Indians keep buying...they think long term...and guess what...they will have the strong fiat in the end..the one everyone wants to use.....so who won...the Yuan won...one

Tue, 02/05/2013 - 12:01 | 3216376 Sudden Debt
Sudden Debt's picture

Actually... I WONDER IF CHINA ALSO HAS TO WAIT 7 YEARS FOR DELIVERY!!!!

Tue, 02/05/2013 - 12:42 | 3216546 JOYFUL
JOYFUL's picture

While the author may indeed be a tad confused about the motivations which will drive gold demand higher in China(they aren't  truly as reactive to inflationary scares - because they've never lost the useful habit of distrusting all governmental promises, and therefore the preference for hoarding physical!) the commentator has definitely lost the thread...

there are no 'missing trillions'...only now are the results of the last forty years(two generations or so)showing up in West and East - one went the way of post industrial 'leisure society' consumerism, the other worked skimped and saved, building stuff we used to make for ourselves.

Think of it like a river...takes a long time for something to flow all the way from the headwaters to the ocean...all those tool n die jobs what floated east a couple of decades ago...the money has finally surfaced in the form of a newly wealthy generation of Chinese who are spending what their parents slaved for. And buying gold is a barbaric tradition which simply never went out of style there!

Take a trip East, and see for yourself...the gold China is now soaking up is the tangible evidence of a shift of gravity every bit as profound as when the big noses finally overcame the Middle Kingdoms' refusal to buy what the barbarians from the West had to offer. What the west did through opium and cheap trinkets the East is doing through cheap trinkets and complacent hopium, which a new generation of i-gadgeted debt slave coolies will soon nuff find fail to ameliorate the hunger pangs for the freeborn life they have traded away,

And whining about it isn't going to help much. The complaint department is closed.

Tue, 02/05/2013 - 11:43 | 3216320 forwardho
forwardho's picture

 

at some point, liquidation of the unfunded liabilities on a massive scale.    

Dude, that realy puts a harsh on my mello.


Tue, 02/05/2013 - 11:41 | 3216315 AllThatGlitters
AllThatGlitters's picture

Somebody was shorting hard into this morning's pop.

Check out the pullback on the live chart: http://www.pmbull.com/gold-price/

The weekly chart doesn't give me much excitement either.

Tue, 02/05/2013 - 11:47 | 3216334 AllThatGlitters
AllThatGlitters's picture

Oops, Silver just went negative too:  http://www.pmbull.com/silver-price/

Tue, 02/05/2013 - 10:55 | 3216174 trav777
trav777's picture

chinamen getting all of teh goledz oh noze

Tue, 02/05/2013 - 11:04 | 3216217 Eally Ucked
Eally Ucked's picture

That will be very interesting to watch clash of Chosen Ones and Chinese shortly, they're so similar and absolutly different at the same time.

Tue, 02/05/2013 - 11:16 | 3216245 GetZeeGold
GetZeeGold's picture

 

 

Maybe Germany should take a hint from China and just buy some gold....at least they'd have some.

Tue, 02/05/2013 - 13:07 | 3216654 ParkAveFlasher
ParkAveFlasher's picture

I'm sure this is happening.  Germans don't fool around.

Tue, 02/05/2013 - 11:09 | 3216227 zapdude
zapdude's picture

...which is laughable anyone would be buying gold at these price, considering it only costs $5 to get it out of the ground.  /sarc

Tue, 02/05/2013 - 11:26 | 3216273 Kaiser Sousa
Kaiser Sousa's picture

and despite this, presented with no further comment....

 

http://www.kitco.com/charts/livesilver.html

 

 

except, FUCK YOU BITCH ASS BERNANKE AND ALL YOU BANKERS........

Tue, 02/05/2013 - 12:07 | 3216402 DaveyJones
DaveyJones's picture

the story of the young bullshit and the old bullshit

Tue, 02/05/2013 - 10:50 | 3216149 Glass Seagull
Glass Seagull's picture

Making their trade surplus look way smaller too. How convenient.

Tue, 02/05/2013 - 10:58 | 3216188 Shell Game
Shell Game's picture

Yeah, how dare they manipulate their data.......

 

/s

Tue, 02/05/2013 - 11:00 | 3216201 Dr. Richard Head
Dr. Richard Head's picture

What a bunch of traditional barbarians.

Tue, 02/05/2013 - 11:20 | 3216255 espirit
espirit's picture

Welcome to the new normal reserve currency, the Reminbi.

Might have to stack a few Pandas here and there.

Tue, 02/05/2013 - 11:28 | 3216279 Dr. Richard Head
Dr. Richard Head's picture

Pandas were my first silver acquisition back in 2008. 

Tue, 02/05/2013 - 12:08 | 3216410 DaveyJones
DaveyJones's picture

and like pandas, gold will soon be an endangered species

Tue, 02/05/2013 - 10:51 | 3216152 uno
uno's picture

We need to have a table of independently verified gold holdings, US constantly at 8,133 makes the table completely useless.

Tue, 02/05/2013 - 12:06 | 3216400 pupton
pupton's picture

Not "completely useless"...late in 2014, China will announce their new public gold holdings in the amount of....8,134 tons and also announce that their currency is now backed by that gold, and that only their currency will be accepted in trade. 

Tue, 02/05/2013 - 10:51 | 3216154 achmachat
achmachat's picture

ha! and right on these news the price get pushed down some more... just so that they can buy even more of it!

this will go on and on, until there's nothing left on this side of the world.

Tue, 02/05/2013 - 10:59 | 3216191 GetZeeGold
GetZeeGold's picture

 

 

China will tip over and capsize if they continue on this course.

 

If that happens don't blame Hank Johnson.

http://www.youtube.com/watch?v=cesSRfXqS1Q

Tue, 02/05/2013 - 11:22 | 3216261 Midas
Midas's picture

Bro-

 

Dats rayciss of you to be dissin lik dat.

Tue, 02/05/2013 - 10:53 | 3216165 CheapBastard
CheapBastard's picture

They must be up to something.

Tue, 02/05/2013 - 10:54 | 3216166 Benedict Farse
Benedict Farse's picture

"How much is that golden dumpling?"

Won Ton.

Here all week, tip the waitress, try the steak.

Tue, 02/05/2013 - 10:53 | 3216167 waterwitch
waterwitch's picture

The Chinese know how  to BTFD!

Tue, 02/05/2013 - 11:02 | 3216212 Dr. Richard Head
Dr. Richard Head's picture

And the US government will somehow find a way to get involved, on the side of Japan, with the Senkaku islands me thinks. Aren't the Chinese heavily involved with Al Qeada?

Tue, 02/05/2013 - 10:54 | 3216168 LongSoupLine
LongSoupLine's picture

Sun fucking Tzu.

 

Eat fucking hot chinese shit Bernanke.  you really fucked up you fucking asshole.  fuck you.

Tue, 02/05/2013 - 10:56 | 3216181 _ConanTheLibert...
_ConanTheLibertarian_'s picture

had a boating accident recently? You seem a bit uptight.

Tue, 02/05/2013 - 11:41 | 3216313 Meat Hammer
Meat Hammer's picture

+100 for profanity.  It just has a way of strengthening a point.

Tue, 02/05/2013 - 12:15 | 3216419 DaveyJones
DaveyJones's picture

hard consonants for hard realities

Tue, 02/05/2013 - 12:16 | 3216443 pupton
pupton's picture

+1 on Sun Tzu.  The Chinese have found a non-violent way to take away from America and "the west" everything it has been using as "power" for the last 200 years.  They will beat the west by making the paper fiat BS we circulate worthless on the world market.  They will make themselves the reserve currency of the world, and the de-facto super-duper power...without firing a single shot.  And the beauty of it is, that the Chinese are doing this while the price of gold is being suppressed by the west in order to keep the west's game going.  The Chinese know that the more they buy, the more the west has to sell/short.  Thus each ounce of gold China takes delivery of strengthens China and weakens the west.  The banksters are drowning in a sea of paper and the Chinese are sitting on top of their heads, piling on ton upon ton of gold to drown those sorry fucks. 

It has to break out at some point.  At some point they will remove their curtain as a backer of honest money, and ours as counterfieters of paper fraud.  China won't be buying our debt issued in dollars any more.  Then OPEC will stop selling oil in dollars.  The US will get desperate and probably launch a war...China will sit back and keep hoarding wealth while the west kills itself and rots away...sad to think about, but seems like the way it's headed.

Tue, 02/05/2013 - 13:23 | 3216726 Kaiser Sousa
Kaiser Sousa's picture

well done man...

nice and tight advancement of a very credulous postulate...

Tue, 02/05/2013 - 15:36 | 3217200 e-recep
e-recep's picture

clever and patient strategy by the chinese. they are using the greed of the west against themselves.

Tue, 02/05/2013 - 10:54 | 3216170 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I'd like to see an official tungsten holdings chart.

Tue, 02/05/2013 - 11:08 | 3216224 mess nonster
mess nonster's picture

How much of that Chinese buying spree is PHYSICAL?

I think Certified Assayer training is a good carreer opportunity.

Tue, 02/05/2013 - 14:04 | 3216880 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

it could be a giant paper dragon, if everyone believes China has “X” amount of gold (like all that fine metal in Ft. Knox) in order to launch a new reserve currency then the entire paper game continues, who is to say they actually have to have it?

  ‘Full Faith and Credit’ becomes ‘Fur Faife and Cledit’ ina da Chyaknees Yoowon

No one is able to verify anything we are being told.

Tue, 02/05/2013 - 10:54 | 3216171 Lost Wages
Lost Wages's picture

I want to know how much China has been mining, because they surpassed South Africa as the largest gold producer and none of it has left the country.

Tue, 02/05/2013 - 10:56 | 3216184 trav777
trav777's picture

if you believe any of the official numbers from China you're dumber than the last guy

Tue, 02/05/2013 - 11:03 | 3216214 MassDecep
MassDecep's picture

Yeah, believing any of the official numbers from China is like believing any of the official numbers from Amerika.

Tue, 02/05/2013 - 11:14 | 3216244 francis_sawyer
francis_sawyer's picture

The only thing that REALLY matters is how many bitcoins they're mining & importing... All the rest is nonsense...

Tue, 02/05/2013 - 11:19 | 3216251 GetZeeGold
GetZeeGold's picture

 

 

I think China gets most of it's Bitcoins from dore bars.

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