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China Holds “Gold Congress” - Positioning Itself As Global Gold Hub, “In China, Gold Is Money”
China Gold Congress in Beijing
The China Gold Congress is currently in full flight in Beijing. The three day Congress is China’s biggest gold industry event of the year, drawing in participants from across the Chinese and international gold sectors including central banks, mining companies, bullion banks and refiners.
The event, co-sponsored by the World Gold Council (WGC) and the China Gold Association, showcases China’s gold industry and acts as a focus point for what is now the world’s largest gold market in terms of demand and product innovation.
Discussions and forums during the event cover everything from reserve asset management for the official or central banking sector, through to investment products and mining supply. One of the key themes this year is the internationalisation of the gold market.
China’s gold market accounts for one third of global demand, and according to the WGC, is expected to grow another 20% cumulatively from now until the end of 2017.
In what is still a very centrally planned economy despite many market related reforms, nearly all reported gold activities in China flow through the Shanghai Gold Exchange (SGE) in one form or another.
Both the China Gold Association and the Shanghai Gold Exchange were established with government backing and their growth and success reflect a very deliberate pro-gold strategy on the part of the Chinese Government.
Even though the China Gold Association is a non-for-profit member association, it still primarily acts as a conduit and coordination group between the government and the gold producers.
The Shanghai Gold Exchange is the government’s second central hub in China’s gold market.
SGE approved refiners take in production from China’s fragmented gold mining industry and in imports from Hong Kong and other countries.
The gold then flows through the Exchange after which SGE deliveries flow out to the banking sector, the official government sector, and additionally to the jewellery and technology industries.
The development of the Shanghai Futures Exchange also provides an additional venue for hedging and gold price discovery.
In China gold is money and is accepted as such by the general population.
There really does not seem to be a debate about this in Chinese government circles, and another part of the government’s strategy has been to advocate the increased innovative usage of gold by the Chinese banking sector.
This is quite a simple strategy for the government to implement since the four big Chinese commercial banks and many other Chinese banks are state-controlled.
Gold is now used widely in the banking sector in structured products, as gold collateral, and in gold leasing. The presence of the Chinese bullion banks in the market via the Shanghai Gold Exchange (SGE) provides the necessary liquidity that is turning the Exchange into a world player on the global gold market.
For example, the large Chinese banks such as Industrial and Commercial Bank of China (ICBC), Bank of China and Agricultural bank of China all offer gold accumulation plans to the investing public and the WGC estimates that these products currently represent between 100 and 200 tonnes of gold. The large banks are also active in gold trading on a proprietary basis via the SGE.
Earlier this year, ICBC via its purchase of some of Standard Bank of South Africa’s assets had been rumoured to be interested in buying a seat on the London gold fixing panel when Deutsche Bank left the panel, but a buyer of this seat never materialised.
ICBC is not yet a market making member of the London Bullion Market Association (LBMA), which would be a prerequisite to becoming part of the gold fixing panel, but given that the Chinese gold market is beginning to overtake that of London in terms of physical flows and probably price formation, there may not be a need for ICBC to bother being such an active participant in the London market as gold business continues to migrate to the East.
The Chinese government is also responsible for granting gold import licenses to international bullion banks and has supported the establishment of the Shanghai free trade zone where a gold trading platform has been set up for international banks and trading houses.
In fact, in an announcement that coincides with the China Gold Congress today, the Shanghai Gold Exchange just announced that it is launching an internationally tradable yuan denominated physical gold contracts to be traded in the free trade zone for the popular retail 1kg gold bar, the Good Delivery 12.5kg (400 oz) bar popular with central banks, and a smaller 100 gram bar contract.
The US based CME Group that runs the Comex gold futures exchange also appears to have used this week’s China Gold Congress to announce the launch of their competitor product in the form of a 1kg gold contract to be traded in Hong Kong.
With increased regulatory scrutiny on the London gold and silver fixings and what looks like a defensive attempt by the LBMA in London to protect their proprietary gold and silver price discovery auctions via the recently introduced CME/Thomson platform for silver and probably soon to be introduced similar CME platform for gold, it will be interesting to see how the Chinese government’s pro-gold strategy pans out.
We may soon see global gold hub wars between London and New York on the one hand and the increasingly powerful eastern hubs of Singapore, Shanghai and Beijing on the other.
MARKET UPDATE
Today’s AM fix was USD 1,247.00, EUR 964.20 and GBP 767.53 per ounce.
Yesterday’s AM fix was USD 1,254.25, EUR 968.46 and GBP 779.91 per ounce.
Gold fell $6.50 or 0.52% to $1,250.00 per ounce and silver slipped $0.11 or 0.58% to $18.98 per ounce yesterday.

Gold in Euros - 2 Years (Thomson Reuters)
The gold price traded in a narrow range overnight in Asia, ending trading in Singapore at $1,247. Further weakness in London trading saw the price slip marginally to $1,240 which is considered a relatively strong support level. Gold is down 0.72% compared to yesterday’s New York closing price.
In London trading today silver weakened further to $18.70 and is 1.63% lower relative to yesterday’s midday London fixing.
Platinum weakened again today by 0.58% to $1,377 while profit taking in palladium continued as it fell 0.95% to $848.
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China, home of the Tungsten gold bar.
Anyone who has been to Mainland China or HK can see for themselves how packed the gold stores are. When I was there I remember seeing a little old Chinese lady carrying out a 1 kilo 24k bar she had purchased. My friend who speaks Mandarin asked her why she bough tit and she lookeda thim surprised and answered, "It's for good luck of course!"
The store even furnishes free security guards to accompany buyers to their nearest bank vault. It's a different world there. They have a long history and know Hard Assets rule. Although many buy land, they also understand the land is NOT owned by them but the gubmint and can be taken away in a second.
"accompany buyers to their nearest bank vault"
I don't know if you are being literal with the bank vault....
But historically, what happens to gold which is stored in a bank vault?
My LCS is out of almost every gold coin. Gainseville coins is out of almost every gold coin. Asian demand is picking up. THe paper market is failing and we will see a big change soon.
It's still on sale.....keep stackin
WARNING - I know this site and clearly this author will tell you how much money you can make from buying gold. Please Please Please learn from my story.
I purchased about $400 worth of gold 7 years ago, to date that investment has costed me in excess of $100,000.
Not only does it put me out of pocket by large sums of money but it has restricted my:
That little circle of shiny metallic hell should be thrown into the fires of mordor!
Maybe you should have got her a bigger ring.
Bow and kiss the feet of the beast.
Well maybe a footrub once in awhile . . .
LOL!
I purchased one 35 yrs ago and do not have a clue how much it has cost!
I don't know. You sound like a nut to me.
I think you missed the joke.
In China they eat cat.
iN aMERICA People do and say anything to dumb down the population so events go under the radar.......
Thanks for coming out to Play.
gold was fixed for a very long time there. After Nixon closed the gold window and gold got its head.....and scared them all
Ok...thats for the herd. Peter Schiff and other gurus out there will show you a chart from the last 5 or 6 years and tell you that gold was, is, and always will be. What they don't tell you is that from 1934 till 1970 gold went down. Thats a 36 years bear market. And it gets worst!! If you bought gold in 1934 you had to wait until 1973 to break even. Thats almost 40 years just to break even. Than came the bull market, if you bought gold cheap in 1970 and sold it when it was expensive in 1980 you made money. Than another bear market....from 1980 till 2001. can you imagine losing money for 21 years? The worst is that depending where you bought in 1980 you are still waiting to break even. So we have 34 years and no break even yet!! I'm not against gold.... but don't ask me to buy it when it gets expensive. If you buy gold now you are playing a dangerous game. I believe it will pop one more time before the bear market but I'm not sure about it. I sold a bunch around the last pop and I'm waiting. If it dives below 1000 I'm out completely. Than i will buy again when I'm retired and I will let my kids and future grand kids decide what they will do with it.
If you bought the Nasdaq in 2000, you're still waiting to break even; if you bought a new Edsel in 1966, you're still waiting to break even; so what? this demonstrates nothing. All markets have highs and lows, and it's always important to have some idea where you are in the wave. If we haven't broken even since 1980, but we know inflation is running like mad, and accellerating, doesn't this mean it's time to buy? aren't we on an artificially low place on the wave? That's what it means to me.
Thats my point pal! You don't buy stuff when it gets expensive.Thanks for corroborating with it. Gold was cheap in the past thats no longer the case. I don't like to buy things in the pick of a parabolic movement. But I do need buyers when I'm selling so KEEP BUYING :) )
It could also mean silver and gold are poor hedges against inflation. Demonstrative evidence seems to prove this theory.
Which Americans could buy gold between 1934 and 1975?
And unless I'm wrong...any owner of gold over time isn't going to lose "money" unless they sell it. But isn't the point not to sell it for shit-paper, and to hold gold as a hedge against devaluation of said shit-paper fiat currencies as they always lose value over time?
Buyers and sellers over short periods of time are using precious metals as investment vehicles to try and profit in paper fiat currencies...that just seems stupid to me.
If gold rises to 2,000/oz or 10,000/oz or even higher, I'm still not looking to sell it for a pile of shit paper...WTF good would that do me???
And you're right...buying gold now isn't a very good idear. At a 66:1 silver to gold ratio, the smart PM stacker will back the truck up for as much silver as he can get. Then wait for that ratio to come down under 20:1 and do some trading for gold...if it can be found by the time that occurs.
In the end it's not about what PM's are worth in paper currency...it's about how many ounces you've stacked.
upticked for debunking his story about Americans buying gold after 1934, and for your important observation that Silver is the savings account of choice. As the man said; "buy low, sell high". You buy what is overlooked and under-bid by the masses. And that is Silver; which always participates in the same "inflation consciousness" rallies that Gold does; but makes bigger percentage gains. What we're waiting for is the shift in viral, or mass, opinion to the importance of inflation, (the on-going devaluation of their currency valued assets), and away from the hypnotic "bigger number" of the dividend, or the interest payment, which leaves you behind in purchasing power; or if you're lucky, in the same place; although this will quickly become unknown.
Silver today should be over $142 using only inflation.
1980 high $49.45
http://www.usinflationcalculator.com/
Today I traded half my paycheck for a 10 oz silver bar , 600 yuan , and 20000 ruble , first time buying yuan and ruble but as part of my stacking goals I wanna diversify into some foreign currencies ...
People would have to be trolls or plain dumb advising buy high sell low strategy. Gold was at 1.900 and has over a long while fallen to 1235 ..... and it was bought for far cheaper than that. So instead of cashing chips in at 1700+ they want to sell at 1235.... ?? LoL I think this is pure troll work.
OK we now know for sure that the fiat price of gold is pure Bank manipulation using paper gold. Without the continuous and heavy daily manipulation gold price discovery reach 1900 (and silver 49) and that was still with Bank manipulation trying to keep some control of it.
So it is very clear that if gold was allowed true fiat price discovery without bank intervention it would be well over 2,000 by now (due to the continous money printing/dilution).
The only question with regard to silver and gold now days is....when does manipulation end, what can cause manipulation to end, how long can manipulation be successful.
There comes a point when TPTB lose control of the USD.........
Recently been race between fall in AUD and Gold.
Techncailly, gold should be over $2,313 dollars today do to inflation alone since 1980.
http://www.usinflationcalculator.com/
Reality is a Bitch. Payback is a Bitch. both bitchs are going to be eating the lunches of the paper worshippers. Tough Shit.
Most infamous quote of the century by Ben Bernanke the Neville Chamberlain of finance: July 13 2013 "NO ONE really understands gold prices, and I dont pretend to understand them either." China understands.
As Upton Sinclair said, 'it is difficult to get a man to understand something when his salary depends on him not understanding it'
Thank you Rocky. I suck at math.
So is all gold sold in tonnes? Or only precious AG/Au metals?
1 oz = $1250 US dollars.
12 oz = 1 lb @ $15,000.
2,000 lbs (ton) = @ $30,000,000.
My math correct?
10 tons = $300 million
100 tons = $3 billion
1,000 tons = $30 billion.
Chicken feed for the Chinese.
USA will probably spend 30 Billion in a month of small wars.
1 tonne is 32150.746568628 troy ounces.
Yes; the word "tonne" refers to a metric ton; 1,000 kilos. the previous poster is ignorant.
Try that with oil, it's even scarrier.
If you don't hold at least 10% in PM you can't spell d-i-v-e-r-s-i-f-i-c-a-t-i-o-n.
But my stockbroker told me I could just own some dividend payers and some household supplies names, and a few Chinese Banks, and everything would be alright. (just kidding)
If Gold really is such a BIG deal in China,
Why don't they stand for delivery for say,
2,000 Tons?
Immediately.
And Sell 1/3 of the American Debt that they hold?, You know, the treasuries based on debt will be owed by your spawn are held by other countries and the Bankers and Elite in the USA hold sooooo much wealth while others lose their houses and others go to bed hungry.
Because if they did, the system would be bust in like 5 seconds. They want to accumulate as long and as much as they can. Why crush the system, if they can get more by playing along "nicely". The damage (to the west) is already done, so no need to push and make it worse than what it already is. The system is doomed, they know it, and TPTB know it. Strong hands accumulate now, and as long as week hands (and the miners) cough up metal at a discount, even better.
You catch more flies with honey than vinegar.
Because they are benefitting from the artificial discount.
Take a look on the gold charts showing "gain" and you will see that those charts are relatively recent. Do you know the reason? Thats because older charts will show a long decline in gold prices. To be more especific gold went down from 1980 till 2001. I believe central banks ( and even the IMF ) are selling their gold to the east because the price is too high. They are letting the suckers in China, India etc buy it while is at or close to the top. In 15 or 20 years central banks will buy it back from the east for one third of the price. I like gold but I'm ready to sell mine at the next pop and buy cheaper later.
Gold measures the worth of paper currencies; so your plan is to buy back Gold when paper is worth more than it is now. How is that going to occur? It isn't going to occur; and everyone with their brain screwed on straight knows this. The metals were hammered by the once in a lifetime US T-Bond that paid actual, real, large, returns from 1980 to around 1993; after that the price continued on "momentum"; ie. public dumbness. T-Bonds will never; never, pay any real return again. Ever. It's completely out of the question.
"metals were hammered by the once in a life time" LOL !! Ok so this time is different....right? Are you aware of inerest payed now? can they go lower? When interest can't go lower where it goes? Can't you hear what the FED is talking about? They are saying they will lower or increase interest? When interest raise what happens with metals? Oh wait.....they get hammered....right? If you are buying or holding your gold you are just like those suckers in 1980. Gold may have one more pop than down. I bought my gold between 1999 and 2000 when suckers like you were buying the tech bubble. I buy cheap stuff....gold was cheap back than....now is too expensive...time to cash my chips.
Interest payments only interest professional math-literate, (big money, market movers), when they are real; eg. over inflation/devaluation. This will never happen. The Fed is trapped between the Devil and a Rock. Eventually interest rates will rise, as, and because, they reflect caution and lack of interest on the part of bond buyers; they will never rise to the point where they represent any significant real payment over inflation; it's mathematically impossible. This is not 1980; it's much, much, much worse than that. Paul Volcker was hung in effigy on Wall Street for what he did; forcing the US to pay actual purchasing power payments to bond holders; in order to save the dollar and kill the Gold rally, at that time. He's our daddy, and he saved our ass, against the will of the "anything for convenience politicians"; only to watch us throw ourselves under the train again. This time there will be no saviour. As I said, it is mathematically impossible.
It is different this time in that most (if not all) Central Banks in the World are printing money (and have been now for years) which has created 2500% increase in debt (I think it is 2500%) since 2007 AND that does not include all the "printing"/QE programs....
This time is is MUCH MUCH different as this has NEVER happened in Known World history!
Based on History, we already know that every single time a currency has been printed (created without a valid backing such as debt or a commodity), the same outcome occurs. A collapse in the currency.
Buy physical assets or you may regret it. Try not to look at the fluctuations going on as they are just the precursors to what is coming.
I believe that most hard assets are being manipulated in the markets right now and thus is why physical markets are being created such in the SGE and in Singapore.
Your post is correct.
LOL!! Yep...this time is different!! So just go ahead and buy gold my friend.
Every "time" is different. Anyone who is capable of mistaking 2015 for 1981 has a very, very shallow grasp on reality.
You needn't bother yourself about it; my long term savings have been in Silver Bullion since 1998. No one is forcing your to save yourself, do as you please.
"the Shanghai Gold Exchange (SGE) provides the necessary liquidity that is turning the Exchange into a world player on the global gold market. "
How will this ever occur if China never allows gold to leave the country?