Gold Tumbles Most In 4 Months On China Demand Slowdown Fears

Tyler Durden's picture

Gold prices are down almost 2% this morning (over $25) as last night's slowdown in Chinese money-supply growth and fears that China's insatiable gold demand has become less insatiable send the barbarous relic back towards $1300. Slowing GDP expectations, increasing restrictions on shadow-banking commodity-backed financing, and a need for liquidity are all factors weighing on the precious metal this morning.



As WSJ reports,

China's appetite for gold is waning after a decadelong buying spree, suppressed by the country's economic slowdown and constrained credit markets.


Demand in the world's biggest gold consumer is likely to stay flat in 2014, according to estimates from the World Gold Council. Gold demand in China has expanded every year since 2002, when it declined, according to the industry group, whose forecasts are closely watched in the gold market.



Chinese consumption has helped to underpin gold prices since 2001, when many price and trading restrictions were relaxed. Last year saw frenzied buying as Chinese investors and jewelry buyers sought to capitalize on low prices. Chinese demand jumped 32% in 2013, vaulting the country past India to first place in the rankings of the world's gold consumers. But it is unlikely that record pace can be maintained, even if prices turn lower, according to the World Gold Council.


"We're looking at best for it to be on par with 2013," said Albert Cheng, managing director for the Far East at the World Gold Council. The council is releasing its latest report on China's gold market Tuesday.


Although the report doesn't offer a figure for estimated Chinese gold demand this year, it says 2014 will be a year of consolidation. "Chinese consumers brought forward jewelry and bar purchases, which may limit growth in demand in 2014," the report said.




"We're not seeing the kind of crazy buying we saw last year," said store manager Karone Huang. Last year, "we couldn't even fill our orders fast enough. That's how busy we were."

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MFL8240's picture

Where did Gold prices go when the Chinese demand was off the charts?  Down!  This whole system is a fucking fraud!!!  The fact is that there is no Gold at all, this was another raid orchestrated by the US government and Federal Reserve by and through JP Morgan to prop up a failing dollar.  I find this so disgusting I cannot find the words to describe this whole system built on lies, fraud and a fraudulent and dsihonest media!

kliguy38's picture

look at it from the least you know you're owned and you can go back to Miley and Kim and GMO

knukles's picture

Guess Charlei Munger's hems are stuffed.

Arius's picture

that is the excuse given for slamming the prices?  well, they must be really desperate ...

how convenient ZH puts this right under the big news on Ukraine ... just in case anyone wonders why?

Will see for how long the guys with money in the table buy it ???my bet not for long...

one thing is for certain, players are running scared, time to withdraw to higher ground


knukles's picture

!% decline is big news?
Nobody cares if Netflix or Tesla go up or down 1%.
Charlie Munger and his Chocolate Skivvy Factory....

kliguy38's picture

on a serious note they might get a quick hit sub 1200 again but it'll be short lived so take advantage . silver MIGHT break 18 BRIEFLY

GetZeeGold's picture



Only Nixon can go to China...and only Chinese can buy gold.

synergize's picture

Not sure I buy this as a reason - why is platinum / palladium falling too?  More behind the scenes...

Serfs Up's picture demand might be "flat" this year according to the entrenched WGC (motto: "We hate gold")...but even the WGC reported in the *very same report* that the WSJ (motto:  "We hate gold") cited that gold demand in China was set to rise by 20% by 2017.

But, as we all know, the WGC "demand" numbers are roughly 30% of actual demand.

Keep spinning boyz.

Tabarnaque's picture

Even if Chinese demand was flat in 2014 (which I doubt) that would still mean that they will "consume" more than the entire world mining production... Left apart India and all the rest of the world. The World Gold Conspiracy can say what ever they want. We all know that they are part of the cartel and therefore rigg their numbers to provide a bearish outlook on gold.

The wheels on the bus are going to fall off's picture

Lets not forget that Indian will likely ramp up on the imports in the second half of this year, expect the new government to abolish the sanctions that are in place

For me its a buying opportunity! 

Son of Captain Nemo's picture

So lets take a snapshot of this one...

The Chinese bought JPMs most expensive piece of real estate in the 4th Qtr of last year that just happened to include the vaults to there PM commodities business and more than likely other banks in the neighborhood...

Anybody been checking with a fine tooth comb what has been going (in and out) of those vaults since that "fire sale" took place that was depreciated by oh let's see... 60% of it's market value some have speculated the spread to be even higher?...

We need an audit!

Perhaps Bukake Bart Chilton of DLA Piper will give us a peek?...

Drachma's picture

Wouldn't Tyler normally call this a "collapse" or "crash" or maybe an "utter routing" of the gold price? "Tumble" seems so dry in comparison. Knuckles knows not to worry about paper prices. Cheers.

HardAssets's picture

All that part of the article after "WSJ reports" - - -


is usually pure bullshit

mvsjcl's picture

The "reasons" they give for any movement is laughable.

kliguy38's picture

no chit......told some friends in manhattan about mungers comments and they were first gen holocaust survivors and they would ONLY smile....they knew how the game is played....

new game's picture

china compliant-if you could see the whole picture-china is part of all this b.s.

but china is buying the actual metal. all i can do is laugh at how obvious this all is.

and how stupid the other half of these trades are...

the smell of fear to get a rational minded human to sell phyzzz!

Gringo Viejo's picture

Last gasp by the cartel? Enquiring minds want to know.

Snidley Whipsnae's picture

All I see are a lot of 'maybes' and negative projections by msm... oh yeah, I left out paper suppression. 

Do people cancel the fire insurance on their homes when the cost of fire insurance drops?

agent default's picture

^^^^ this.  They will do anything they can and even attempt what they can physicaly not do in order to maintain control.  And then it will all come crashing down hard.

ziggy59's picture

Exactly! Bloomberg says World Gold Council says opposite..China Gold Demand Rising 25% by 2017 as Buyers Get Wealthier

Snidley Whipsnae's picture

We know what happened when the paper pushers forced gold price to around $1180... Physical demand in East and Mid East went through the roof.

Why would the paper pushers expect a different outcome this time?


RealityCheque's picture

They've done 3 QEs with the same exact results.

They are either as dumb as fuck, or smart beyond compare. 

The line inbetween is almost impossible to see.

new game's picture

one thing you and i must comprehend is they control the inputs and outputs. so where this goes is not for me to speculate...

Cattender's picture

it's the "new normal" at least thats what my dad says! (he's got an MBA!)

Seer's picture

Sorry to hear that.  We can't all choose who are parents are.

johnnyarrowmaker's picture

Agree with everything you have said, but according to a back of envelope calculation, about 40 tons of gold dropped the price today.

By sheer coincidence, 40 tons arrived last Friday from Ukraine!!

Surely some mistake?

Seer's picture

"I find this so disgusting I cannot find the words to describe this whole system built on lies, fraud and a fraudulent and dsihonest media!"

The word you're looking for is: PONZI (or, a couple of other alternatives might be: PAPER; VIRTUAL)  Tis the world of unicorns, all make-believe.

new game's picture

seer, losen some soil and plant some seeds and enjoy the day! that is reality! all this other shit is one big storm cloud brewing...

LooseLee's picture

Yea. Just listen to those bootlickers on Bloomberg radio---Tom Keene and McKee. Both have 'jobs' that require them to 'not know' or espouse 'The Truth'. What lame pathetic soul of a man could be such a coward? They have prepared for themselves an eternity of wailing and gnashing of teeth!

SoilMyselfRotten's picture

Ohhhh, that China slowdown fear. Only $25 smash?

And they are finally growing weary after a decade of buying? <eyeroll>

spanish inquisition's picture

Wohoo! I gots dry powder baby!

Its_the_economy_stupid's picture

yes. 1250 and i'm back in again. pretty please.

Strider52's picture

Me too spanish; I'm getting tax refunds, they're going straight into a new leaky canoe.

Kaiser Sousa's picture


keep stackin...

GetZeeGold's picture



The gold EBT program.

Being Free's picture

It is rigged and we've seen thias movie before.

The setup ... the hook ... the wire ... the STING

NOTW777's picture

so WSJ interviewed or polled millions of chinese gold buyers?  ha

Latitude25's picture

The price of gold has nothing to do with Chinese physical gold demand.  Otherwise it would have hit incredible new heights in January and Feb this year not to mention last year.  This article is pure propaganda.

GrinandBearit's picture

Hope it goes down to $1000.  I need moar.

Mr. Magoo's picture

Just another excuse to smack down the price, The COMEX is running so low on supplies it has to use another way to manipulate. I am sure the Chinese have no problem with it since what they buy is ALWAYS unreported

rabetwoirr's picture

With the "all-in" cost to produce gold ranging between 1000 - 1300 usd/oz for different miners, it would be a impractical proposition.

fonzannoon's picture

Don't worry 4 guys on the phone in London will fix this until the bullion banks manipulate it down again but incredible Indian demand will help it strengthen but Chinese copper contracts tied to mouse shit will alter the perception negatively but only until JPM's vault can't meet delivery for the 23rd straight month but no one gives a shit because the GLD is now seeing inflows.

This stuff is easy to underestand you just have follow the story lines. Silver, on the other hand, has just been a consistent pile of shit, which is what you want in an asset. consistency.

Charles Nelson Reilly's picture

Complete and total propaganda courtesy of the WSJ. I used to have a subscription. Cancelled it years ago. They called last week with a great deal for me. I laughed out loud at the poor sales rep. I told them I'd only be interested if then brought Tyler Durden on to replace that douchebag Hilsenrath.

ziggy59's picture

And Yellen speaks Weds in NY on economy...

Gringo Viejo's picture

Bullshit. If I can offload a dollar for anything of substance you can bet I'm going to. Saving in dollars is suicidal. This article is simply, government propaganda.

TammanyBrawl's picture

And that right there is why I stack. Gold will go up and gold will go down, but it's a certainty that the dollar will weaken, if not outright collapse, in the future. My faith in gold is reciprocal to my lack of faith that the 'leaders' of the US will dig out of the hole they've created. When the Dollar loses resrve currency status, I'm covered.