China Surpasses India As Biggest Buyer Of Gold Following Record 2013 Imports, Consumption

Tyler Durden's picture


Two weeks ago we learned what many had already known just by extrapolating simple trends: in 2013 Chinese net imports of gold from Hong Kong alone rose to over 1000 tons of gold, or 1158 to be precise - 100 tons more than China's official gold holdings of 1054 tons which have not "budged" in the past four years - following another significant net monthly import of 94.8 tons of the precious metal in December (and 126.6 gross). This means total gold imports in 2013 was more than double the 557 tons imported in 2012, and as a result China has now officially surpassed India as the world's biggest buyer of gold (although the title may swing back to India once gold price controls are relaxed, or if the government were to count all the gold smuggled into the country via illegal channels).

As the chart below shows, no matter what the price of paper gold does, the Chinese bid remains unwavering.

Reuters summarizes China's insatiable apetite for the yellow metal:

China's gold consumption jumped 41 percent in 2013 to exceed 1,000 tonnes for the first time, an industry body said on Monday, as a sharp slide in prices attracted buyers for jewellery and bullion.


The demand surge has helped China become the No. 1 gold consumer and should support prices, which took a hit last year from expectations of a tapering of commodities-friendly economic stimulus by the U.S. Federal Reserve and a drop in demand in the other major buyer India.


Gold consumption in China grew to 1,176.40 tonnes last year, with jewellery demand climbing 43 percent to 716.50 tonnes and bullion demand soaring 57 percent to 375.73 tonnes, the China Gold Association said on its website.


Chinese demand hit a record as gold prices fell for the first time in 13 years amid an improving global economy and a rally in equities. Prices tumbled 28 percent in 2013.


"The sharply lower prices attracted a lot of Chinese consumers looking for bargains," said Chen Min, an analyst at Jinrui Futures in Shenzhen.


"Gold will continue to be an attractive investment in China in the near term as prices look steady near $1,200 an ounce," Chen said.

As a reminder, official gold holdings are not included in these numbers:

China's gold consumption figures do not include demand from the central bank, whose gold reserves stand at 33.89 million ounces (1,054 tonnes), unchanged since April 2009, according to the latest figures on the central bank's website.

Regarding said PBOC gold holdings, Reuters confirms what our readers have known since September 2011:

China last announced a rise in its gold reserves in April 2009 and has not revised the figure since, though there had been recent market speculation that the bank had been accumulating gold reserves and would announce a new figure.

Of course, we doubt anyone would be surprised by the unveiling of any updated PBOC holdings especially after one considers just how ravenous China's gross imports since our September 2011 article have been, summarized best by the following chart.

As we have said before: keep an eye on the "gold holdings" of the GLD and other US paper gold ETFs, whose drop in holdings for now has offset Chinese accumulation on the margin. Once GLD gold holdings solidly resume their climb higher, that will be the key upward gold price inflection point.

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Mon, 02/10/2014 - 11:27 | 4419849 Kaiser Sousa
Kaiser Sousa's picture

anybody that doesnt understand that London is the center of the manipulation is just fucking willingly blind....always near or at the close...


Mon, 02/10/2014 - 11:33 | 4419872 Stuart
Stuart's picture

Somebody should inform the World Gold Council China is buying gold. 

Mon, 02/10/2014 - 11:40 | 4419904 kliguy38
kliguy38's picture

DO NOT assume that China is not completely involved in the suppression scheme as the final bullion accumulation for them nears completion before the fiat ponzi music stops and the scramble for reserve chairs begins in earnest..........just accumulate and forget about all the noise.

Mon, 02/10/2014 - 11:43 | 4419910 BaBaBouy
BaBaBouy's picture

FEd Advises GERMANS If They Want Their Physical GOLD Back,

BEG For It From The Chinese...

Mon, 02/10/2014 - 12:13 | 4419988 CitizenPete
CitizenPete's picture

Yeah. I believe Sprott already penned that one and then logged the exchange that followed.

Mon, 02/10/2014 - 11:55 | 4419931 SAT 800
SAT 800's picture

This is an official reccomendation from your buddy, here, to buy Silver; right now; right around now; today or tomorrow; for people with a timeline on this trade of at least Christmas Time this year; this is not a reccomendation for people with a two week timeline. I'm seeing a lot of buy signals; these are my buy signals, developed over thirty years of silver trading; I'm pretty sure I"m right; but I might be wrong. You'll make more profit on silver than gold. For the little people; don't forget the 90% US coins that are still available from various vendors listed on t he internet; they are really hard to beat as an investment, and as SHTF spending. Cheers, everyone. for those of you who are following my trading; I'm newly short the S&P500 from 1790, this morning from before the opening; and we'll see how that goes. Bye for now.

Mon, 02/10/2014 - 12:26 | 4420037 BandGap
BandGap's picture

Well, somebody knows something. Silver mining stocks are taking off the last 3 sessions.

No money to buy anything right now, hope I have enough.

Mon, 02/10/2014 - 12:34 | 4420070 quasimodo
quasimodo's picture

Im guessing you have at least 10 oz, that is probably MOAR than 90 some percent of the other bleating sheep surrounding you.

Mon, 02/10/2014 - 13:11 | 4420172 SWCroaker
SWCroaker's picture

Interesting when you do a quick division of estimated "above ground" oz of au and ag by the number of peeps on the planet.   *Both* come out to be around 1 toz per belly button.   10oz is being a pig, if you are into equality; having multiple 100oz bars, or multiple monster boxes is down-right avaricious.

Me, I have a slight flaw in my character.

Tue, 02/11/2014 - 00:22 | 4422732 Doctor Who
Doctor Who's picture

I have a different view.  Load up on what you can, and keep the wealth local.  While the majority of metal is shipped over seas, you can trade it locally for important things that you can't produce yourself offering your local economy a store of value.  To even own 1 oz of precious metal is more than most of your neighbors have.  Disclaimer:  I'm not wealthy, but I have a great sense of value. 


We also have a local mint where my 100 oz bar purchaced in the imaginary distant future can be broken down into localized currency.  Currency collapse wipes out wealth, not local buildings and families and effort.  All it will be missing is something tradable as the store of wealth.


Mon, 02/10/2014 - 11:57 | 4419937 Quinvarius
Quinvarius's picture

The vast gold mines of England are surely the source of all this gold.   Heh.  You know this all going to end with a quite a few "respectable" people in jail next to Madoff.  Everything bankers ever do is part fraud.  This is their biggest one.

Mon, 02/10/2014 - 12:03 | 4419960 SAT 800
SAT 800's picture

LOL. Vast gold mines of England; they wish !! Probably a recurring dream of the BofE manager.

Mon, 02/10/2014 - 12:38 | 4420079 quasimodo
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Yes, they made a huge discovery in the North Kent Marshes. Millions of oz's will come to market soon, very easy to mine and I hear the nuggets are top grade.

Mon, 02/10/2014 - 12:07 | 4419976 Mister Kitty
Mister Kitty's picture

The biggest buyer of gold is your mother's ass.  Deflation, deflation, deflation.  Learn it, live it, love it.  Bitches.

Mon, 02/10/2014 - 12:32 | 4420064 superflex
superflex's picture

Welcome to ZH.

Now fuck off and die, troll.

Mon, 02/10/2014 - 12:59 | 4420143 greggh99
greggh99's picture

Where? Where? Where? I'd love to live with deflation. The only place I see it, is for anything you can plug into an outlet or charge. But how many gadgets do we really need to buy? My rent keeps going up, never down. Public transportation keeps going up, never down. Health care costs up, never down. Food prices up. I'd love to have deflation in the items the majority of the population spends the majority of their money on. But it ain't happening. Ain't going to happen.

Mon, 02/10/2014 - 12:21 | 4420018 Kaiser Sousa
Kaiser Sousa's picture

well lets c if they can pusch the phony paper price back down below 20 again in the last 10 minutes of fraud in London...

notice the Comex open dump followed by the continued selling going into the London close...same bullshit every day...

Mon, 02/10/2014 - 12:32 | 4420060 Canadian Dirtlump
Canadian Dirtlump's picture

Somebody must have figured out a way to 3d print gold because with all this demand outstripping yearly mine / scrap supply they must be getting it somewhere and lord knows central banks still have all theirs and all other allocated and unallocated accounts are sacrosanct.


*shits pants*

Mon, 02/10/2014 - 11:29 | 4419857 prains
prains's picture

pretty soon it'll just start "blobbing" up on the road side like the craps everyone leaves behind

Mon, 02/10/2014 - 11:29 | 4419859 Temporalist
Temporalist's picture

I thought AKAK would be the first...but thanks all the same haha.

Mon, 02/10/2014 - 11:28 | 4419860 Charles Nelson ...
Charles Nelson Reilly's picture

note to self.... keep buying gold.

Mon, 02/10/2014 - 11:29 | 4419864 q99x2
q99x2's picture

Imprison the FED and Jamie Dimon for selling all the US Gold Reserves.

Mon, 02/10/2014 - 11:33 | 4419876 Sufiy
Sufiy's picture

A lot of mass media buzz about China and Gold today. Stories in WSJ, Reuters and Bloomberg. Gold is breaking out to the upside from $1270 level now.

Toby Connor: The Great Inflation Of 2014 - Gold And Silver To Rise 

Toby Connor provides very interesting technical view on the general markets, Commodities, Gold and Silver. Nobody can find inflation these days and his take on the final rise and bust in the general markets is very intriguing. Our own observations confirm the CRB - Commodities Index breakout and that Gold is knocking on the $1270 with huge break out to the upside after that. Supply and Demand picture provides further support to the technical observations in Gold and Silver markets these days. Where the Gold will come from in the future with China record buying continued? M&A activity will be driving the next Bull market in Gold and Silver miners.

Mon, 02/10/2014 - 11:37 | 4419885 Took Red Pill
Took Red Pill's picture

Why buy gold? In 1933, when they asked people to trade in their gold, 5 gold coins were equal to $100. Today, those 5 gold coins are worth over $6000! And that $100 bill? The purchasing power of that has dropped to $6.

Mon, 02/10/2014 - 11:47 | 4419898 Croesus
Croesus's picture

"Why do they view their debt in terms of yield when it only returns more of the same paper? The only way to convert the return on this American debt is by buying something real with it. Only then do we have a “yield”. The Westerners use “paper to price paper” and “more paper to price more paper” in an endless quest to add value where value only exists in the minds of men. To this end they say we have lost value holding gold, but our families and children cannot go broke. No one owes us and we owe no one, and we do not “convert paper to something real” to create “yield”. We already own our “yield”, no conversion needed!"

Mon, 02/10/2014 - 11:57 | 4419938 SAT 800
SAT 800's picture

The only difference between Gold and Silver today in investment terms is; in Silver you make more profit; and b.) the government is not interested in Silver. So, if you insist on buying gold you can guarantee two things; less profit and more government interference in your alternate investing life. Cheers.

Mon, 02/10/2014 - 11:44 | 4419908 QE49er
QE49er's picture

Trillions of dollars printed + entire countries buying at record levels = Gold at 3 year low.  This makes a lot of sense.

Mon, 02/10/2014 - 11:45 | 4419909 Bahamas
Bahamas's picture

I tell you one thing: they are not going to be able to import my stash, 'cause I ain't selling!

Mon, 02/10/2014 - 12:08 | 4419970 CitizenPete
CitizenPete's picture

... "at any pwice dambit!" he he he Ya right. I have a few monster boxes you can have at $60.

Mon, 02/10/2014 - 11:52 | 4419913 Ham-bone
Ham-bone's picture





= 4500 tons


= 4500 tons

Mining = 2200 (+ 700 tons China/Russia never brought to market)

ETF's, etc. = 960 tons

COMEX = 100 tons

SCRAP = 1400 tons

'13 delta between mining and demand of about 2300 tons...this was made up by ETF / COMEX outflows, scrap sales (everything phyz supplied not mined)

If demand remains about constant in '14...where will the 2300 ton/yr supply come from to make up for this shortfall???

Mining = +100 tons/yr

production will peak in '14 before beginning to decline in '15 (due to defunded exploration and cap-ex, shut downs/slow downs of marginal mines)...if price falls further, mining output is likely to go negative

ETF's, etc. = +0 tons/yr

if prices remain @ current, no further disgorgement is likely after '13's 30% gold price decline and 1350 tons to 790 tons (40% drawdown of GLD, largest holder of bullion)

COMEX = 100 ton outflow in '13 was a 90% decline in deliverable and overall decline of 35% total holdings...

Scrap = 1400 tons in '13 likely to continue falling by 100 tons/yr @ these prices...(scrap supply has been falling from peak of 1750 tons/yr in '09)

Net Net - '14 @ current prices w/ continued demand faces a shortfall in supply of 1000 tons (20% of total demand)...if prices fall further, mining/scrap supply will fall in line with ETF / COMEX disgorgements...

Mon, 02/10/2014 - 11:59 | 4419940 SAT 800
SAT 800's picture

The Silver Statistics are even more alarming. Silver is in short supply; and we don't think there's any magic due any time soon.

Mon, 02/10/2014 - 13:46 | 4420281 Ham-bone
Ham-bone's picture

do you have any good data on supply/demand, inventory regarding silver?

Mon, 02/10/2014 - 11:49 | 4419922 Sudden Debt
Sudden Debt's picture

those chinese must really hate gold...

Mon, 02/10/2014 - 12:01 | 4419953 SAT 800
SAT 800's picture

Keep eating those waffles; Belgium needs your economic help. We used to call them belgian waffles, but I have no idea why; I'm pretty sure they're not actually a Belgian commoditiy. Do you still have the Silver in the trunk of your car? I loved that post from years ago. Chiao.

Mon, 02/10/2014 - 12:56 | 4420134 Sudden Debt
Sudden Debt's picture

they call them belgium waffles because everything that's good comes from Belgium!

Mon, 02/10/2014 - 12:05 | 4419967 Bahamas
Bahamas's picture

What do they need all that gold for? One can not wipe ass with gold? Dollars are so much better with the green minty ass wipe feeling

Mon, 02/10/2014 - 13:30 | 4420048 Hongcha
Hongcha's picture

The PRC is loading in preparation for the Yuan to become the reserve currency for the Asias; if not the world.  Also to pay for oil.  Maybe a conflation of the two, probably a complex of reasons.  

On my last flight back from HKG I sat next to a guy (American) who works for SEACEN in KL, Malaysia; who told me the Pan-Asia reserve currency plan is the rumor he is hearing.  

But one's own lying eyes can clearly see that the PRC is loading.  For what else?  For the tradition?  

Of course we don't know but our dear leaders know what is best for us.

Cash4Gold places all over Concord CA (decaying middle America).  There must be two dozen Cash4Gold 'sites' in this little burg.  Amerikans in their hapless ignorance are throwing away exactly that which they most need to keep, at precisely the wrong time.

Mon, 02/10/2014 - 12:35 | 4420066 Obama_4_Dictator
Obama_4_Dictator's picture

All your Gold are belong to us.

Mon, 02/10/2014 - 12:41 | 4420094 RafterManFMJ
RafterManFMJ's picture

Should the PBOC announce 6K+ tons of gold this April, Katie bar the door on gold!

It'll be a massive bitch slap across the face of the West and might even awaken Boobus Amerikanus.

Mon, 02/10/2014 - 13:08 | 4420166 RaceToTheBottom
RaceToTheBottom's picture

If china is buying gold to impart some sort of respectability for their currency as the World approaches a reserve currency shuffle, how will their behavior change after they have reached that level of gold purchases?

Real question.


Mon, 02/10/2014 - 13:44 | 4420278 TuPhat
TuPhat's picture

They will always want more.

Mon, 02/10/2014 - 13:51 | 4420288 Seeking Aphids
Seeking Aphids's picture

Chinese govt strongly encourages its citizens to buy gold.....that is not going to many ounces X 2 Billion (give or take a few hundred million) do you need to surpass global production?

Mon, 02/10/2014 - 13:42 | 4420272 fijisailor
fijisailor's picture

To all you BTC lovers.  Why doesn't gold flash crash like BTC?

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