Gold Buying Frenzy Continues: China, Japan, And Australia Scramble For Physical

Tyler Durden's picture

We noted here that the plunge in the paper price of gold (and silver) had prompted considerable renewed demand for physical and now it seems the scramble among the "more stable investor base" is increasing. The shake out of ETFs and futures has left the Australian mint short of deliverables and Japanese and Chinese gold retailers seeing a "frenzied" surge in demand. The customers are not just the 'rich' or 'elderly'; in China "they tend to wear water shoes and come directly from the market...;" in Australia, "the volume of business... is way in excess of double what we did last week,... there’s been people running through the gate," and Japanese individual investors doubled gold purchases yesterday at Tokuriki Honten, the country’s second-largest retailer of the precious metal. The panic selling by a weaker 'imminent inflation-based' investor base has sparked physical shortages - "there’s been significant sales made as people see this as great value." It seems our previous discussions of a rotation from paper to physical were correct and this physical demand will eventually leak back into the paper markets.


Australia (via The Age):

Gold sales from Perth Mint, which refines nearly all of the nation’s bullion, have surged after prices plunged, adding to signs that the metal’s slump to a two-year low is spurring increased demand.


“The volume of business that we’re putting through is way in excess of double what we did last week,” Treasurer Nigel Moffatt said, without giving precise figures. “There’s been people running through the gate.”




“There’s been significant sales made as people see this as great value,” Mr Moffatt said. “Gold owners are very reactive to significant market movements.”




The Perth Mint’s sales of gold coins climbed 49 per cent to 97,541 ounces in the three months ended March 31 from a year earlier

China (via China News):

Beijing gold store two hours to sell 20,000 grams of gold bullion trading volume of nearly 200 million

and (via YCWB):

People have to rush to buy gold, ... gold bullion out of stock yesterday, investors yesterday to spend as much as 600 million yuan to buy 20 kilograms of gold bars


The mad pursuit gold insufficiency is not just a game for the rich. Yesterday, the Yangcheng Evening News reporter learned from the East flowers to Bay store, many growers, pork traffickers, fishmonger recently put down his job went straight to the mall to buy gold.

Japan (via Reuters):

Some Japanese also harbor fears that the expansionary monetary and fiscal policies dubbed "Abenomics", coupled with a national debt more than twice as large as annual economic output, could trigger a crisis down the line.


Skeptics about the radical attempt to reflate the economy -- or those simply worried that a slide in the yen that began in anticipation of Abe's election victory last December will continue unabated -- are still buying gold, dealers say.


"Investors in gold are convinced that Japan's fiscal position will get worse," said Wakako Harada, general manager of Japan's top bullion house, Tanaka Kikinzoku Kogyo.


"What I see at our counter is that more people are getting worried about Japan. That's why we are seeing a lot of buying."




"In contrast this time, we are seeing interest to buy on dips to take exposures to gold,"




"Investors are using this opportunity to buy gold to diversify beyond bonds, stocks and the yen currency as Japan's fiscal situation could deteriorate."

(via The Age):

Japanese individual investors doubled gold purchases yesterday at Tokuriki Honten, the country’s second-largest retailer of the precious metal.

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fuu's picture

Gold Bitchez!

Mr. Poon's picture

Well. thank goodness whoever dropped the big sell order on Friday was long, not just opening up a naked short position that would later have to be covered, and which could be ruined if an unexpected rally were to happen between now and delivery.


Pladizow's picture

I didnt think we'd see gold in th 1300's ever again.

When we did, I bought 25% of all I could afford!

gmrpeabody's picture

Common sense would agree..., but sense isn't that common any more.

Long_Xau's picture

"But but... we PROMISE and our backers GUARANTEE that we will deliver the 400 tons on time and in full when we produce them from a burried in a landslide tungsten mine! I swear to god you are being absolutely totally incomprehensibly stupid not trusting our word!"

krispkritter's picture

Paper gold 'guarantees: 'There's gold in them thar shills!'

TwoShortPlanks's picture

Last time I raped the Perth Mint it was at the bottom of the $50 smack down. I bought off people standing in line to fucking sell, LOL.

Max Keiser and Stacy joked that I was Jamie Dimon buying up physical to plug JPM shorts.

Love to have been there today; repeat offender!

somecallmetimmah's picture

Anyone out there actually seeing discounted gold or silver bullion? Granted, I live in Po-dunk, but I'm not seeing it here.

BoNeSxxx's picture

Discounted???  Heck, my coin shops don't even have any to sell!

Spider's picture

Gold production costs are at 1290 per ounce for 2012 - we're about to see some major imbalances in the marekt

Divided States of America's picture

The worst thing for the central banks is when people take the money out of their fuckin bank deposits to buy gold, thats basically an automatic deleveraging of the entire global financial system. And it has started in earnest. Lets see how long before the fuckin banks have to dump their stock holdings to make up for the drop in collateral.

Dr. No's picture

Huh?  When people take money from their savings and buy gold, the gold dealer takes that cash and puts it back into the bank.  There is no net loss of monetary base.  If the gold dealer stuffed it into his mattress, then yes.  And if they use a debit card, then there is not even a temporary drop ini reserves.  Its just a transfer of digits.

RockyRacoon's picture

Eventually the money stops (velocity goes to zero).  That's deleveraging.  You have to look past the first transaction.   The fiat has become a fixed asset in gold.  That's not good for a credit-based economy... which is fine with me.

tip e. canoe's picture

excellent point, rock.    metals are velocity sinks.

paper smothers rock, but scissors (rock molded by human ingenuity into a tool) cut paper.

Divided States of America's picture

Rocky hit it on the nail, I should have been more clear but basically yes, the velocity stops because its all stuck in the nuggets whereas it could have been multiplying like the H2N9 virus

francis_sawyer's picture

Anyone out there actually seeing discounted gold or silver bullion? Granted, I live in Po-dunk, but I'm not seeing it here


A friend of mine happened to be going to the coin shop yesterday... Just for the lulz, I told him to ask the dealer what the spot + premium for ASE's was [& if you could get it anywhere near $26 or $27]... HAHAHAHA... $32.50 [& they only had 20 in stock]...

DaveyJones's picture

"stuck in the nuggets"

bumper sticker

tip e. canoe's picture

clowns to the left of me, jokers to the right,

here i am, stuck in the nuggets with you...

Kirk2NCC1701's picture

[Cue music from movie Deliverance]... "You sure got a pretty bar, boy!"

Like the price of $1421.  Barely over spot.

Joe Sixpack's picture

Here is APMEX's 100 ozt. silver bar inventory history for April 15th. Talk about cleaning out the shelves!



fonestar's picture

We must remember during times like these that markets are not rational and are prone to herd mentality sell-offs.  When the markets realize that none of the fundamentals have changed, investors will return to the only safe-haven asset that has offered protection throughout the centuries.... bitcoin.

JimBowie1958's picture

Lol, you had me till the end there.

Bitcoin has not been around for centuries.

But it was funny as hell.

Dr. No's picture

Only if the FED is selling gold (asset) is monitary base been reduced.  If buyers/sellers are transacting, its just changing hands.  Its not "tied up".

Panafrican Funktron Robot's picture

Note the steady decline approaching 1.  It should be noted that, the closer we get to 1, the closer we get to the event horizon.  

Dr. No's picture

I disagree.  If a guy keeps his money in savings, velocity is zero.  If he withdrawals the money, buys gold, and the dealer (or the producer for those who cant connect dots) puts the money back into a svaings account, The velocity has not changed, infact it picked up a bit due to the transaction.

kliguy38's picture

"the gold dealer puts it in the bank"......BWAAAAAAAAA......he puts it right back into gold!!!!!

Bay of Pigs's picture

That was my thought too, lol

Dr. No's picture

Unless the FED is selling gold or the dealer/producer destroys (i.e mattress stuffing) the money after the transaction, the monetary base did not change.

RaceToTheBottom's picture

This is the FEDs way of making use of all those reserves in banks they shored up. 

somecallmetimmah's picture

Exactlty.  My LCS had about 7 pathetic, worn Morgans.  Two of them mounted as necklace pendants (uggg).  Even those were $27 a piece.  When does this disconnect between paper & physical reveal itself?

tip e. canoe's picture

those necklaces were a steal at $27 mate -- perfect amulet for vampire protection, esp. when they're named after dracula himself.

Kirk2NCC1701's picture

People of Australia, China, India, Japan,

This is a BIG mistake.  Do NOT buy bullion.  In your case... it's too risky for confiscation, the storage costs are high and you risk outright theft from envious neighbors.  Even muggings.  You're much better of -- and pay less margin at both ends -- if you hold either Unallocated Pool Accounts or paper-Gold.  More liquid and portable.

You should leave the risk of hoarding bullion to North Americans, who are more used to this kind of thing, and who can store it in the great open areas or lake bottoms. Plus, unlike the Aussies, we have guns to protect the Precious and keep it out of the hands of your corrupt or socialist governments.

I'm sure other N. Am. ppl will agree with me on this.


jesse livermoore's picture

my local coin dealer had 10 eagles i bought them all   28.50 a piece

RobD's picture

Lower price maybe but not a big discount. Got a 1oz bar of gold at the local coin shop yesterday at $57 over spot(got lucky spot was at a inter-day low at the time) so it was $1426 out the door. They were out of silver bars and had very few ASEs.

TeamDepends's picture

Can you imagine the "reshuffling" going on behind closed doors?

RagnarDanneskjold's picture

Not everyone is happy about the low prices. A Chinese guy leapt to his death from a tall building.

kliguy38's picture

he shouldn't have been playing paper gold.......

Dr Benway's picture

Some Australians invest in gold, especially those with Chinese heritage. Most Aussies, however, have a subconscious atavistic urge toward criminality and dodgy schemes.

Check out my newly updated presentation on Australian share market manipulation:

midtowng's picture

Who are those crazy people buying gold? Don't they know that you can't eat it (the only reason to own anything is if you can eat it, right? That's why people want dollars)

People need to just trust the maestros at the central banks. They can do no wrong.

RaceToTheBottom's picture

I would like to stuff some gold up the Maestro's ass.  Actually make that 200 OZ of Silver instead.  Size matters

Joe Sixpack's picture

How about 400 ozt. gold plated tungsten bars (after scraping the gold off)?

RockyRacoon's picture

Common sense would agree...

Common sense is not what everybody knows, it's what anyone would understand if it were explained to them.  So, on that basis, there is no common sense application here.   An explanation would go over the head of the average person.

eigenvalue's picture

Well. I think we need some time to repair the damage done. It seems that $1500 & $26 will not be regained this month. 

GOSPLAN HERO's picture

A Money History Moment - The Continental Dollar

"By the end of 1778, Continentals retained from 1/5 to 1/7 of their face value. By 1780, the bills were worth 1/40th of face value. Congress attempted to reform the currency by removing the old bills from circulation and issuing new ones, without success. By May 1781, Continentals had become so worthless that they ceased to circulate as money. Benjamin Franklin noted that the depreciation of the currency had, in effect, acted as a tax to pay for the war. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value." - wikipedia

imaginalis's picture

Who was on the other side of that trade?

Handful of Dust's picture

Unconfirmed reports claim Charlie Munger was spotted in a gold coin shop buying kilos of the 'foolish' metal disguised with a womens wig and blue sheath Kohls dress and 3 inch heels.....


Unconfirmed....just be updated as more news comes in.....

auric1234's picture

Great. The lower it goes, the more we can buy before the whole thing crashes!


GetZeeGold's picture



I bought 25% of all I could afford!


It's thoughtful to leave some for others.


Wish I could say the same about the ammo's dog eat dog over there.