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Shanghai Exchange Chairman Admits China Gold Demand Topped 2000 Tonnes In 2013
Submitted by Koos Jansen via BullionStar.com,
This is the final blow for the ones who still couldn’t comprehend, after all evidence presented, the amount of Chinese non-government gold demand in 2013. At the LBMA forum in Singapore June 25, 2014, one of the keynote speakers was chairman of the Shanghai Gold Exchange (SGE) Xu Luode. In his speech he made a few very candid statements about Chinese consumer gold demand, that according to Xu reached 2,000 tonnes in 2013. In contrast to the Word Gold Council (WGC) that states Chinese gold demand was 1,066 tonnes in 2013. Xu's speech has now finally been translated and published in the LBMA magazine The Alchemist #75.
Xu's statements once again confirm what I have been writing for months. SGE withdrawals equal Chinese wholesale demand:
import + mine + scrap = total supply = SGE withdrawals = wholesale demand
Let's go through a couple of quotes from Xu:
Data on China’s gold imports has not previously been made available to the public. However, gold has historically been imported through Hong Kong, and Hong Kong is highly transparent, disclosing details such as the number of tonnes of gold imported on a monthly basis. Last year, China imported 1,540 tonnes of gold. Such imports, together with the 430 tonnes of gold we produced ourselves, means that we have, in effect, supplied approximately 2,000 tonnes of gold last year.
The 2,000 tonnes of gold were consumed by consumers in China. Of course, we all know that the Chinese ‘dama’ [middle-aged women] accounts for a significant proportion in purchasing gold. So last year, our gold exchange’s inventory reduced by nearly 2,200 tonnes, of which 200 tonnes was recycled gold.
Again, we can read the simplified equation (for 2013):
import (1540t) + mine (428t) + scrap (229t) = SGE withdrawals (2197t)
Additionally, it's very clear what kind of metric the SGE uses. Xu subtracts recycled gold from SGE withdrawals to measure consumer demand, which equals newly added gold (import + mine = 1968t) to the private holdings of Chinese citizens. Confirming the Chinese gold market with the SGE at its core, is designed by the PBOC to track the quality and quantity of gold held in non-government reserves.
By flipping the variables in the formula I was able to estimate Chinese import in 2013 (SGE withdrawals - mine - scrap = import) by an error margin of only 2.6 %. Year to date SGE withdrawals account for 1425 tonnes, of which I estimate 855 tonnes was imported. Western media are still focusing on the amount of gold Hong Kong net exports to China, which is dropping like a brick, as a proxy for Chinese imports. However, this data has dramatically lost its significance as China has openly announced it imports more gold directly into cities like Shanghai and Beijing. This was clearly communicated, see the next video from 1:14.
The Shanghai Customs department published a press release September 19 on their website saying they imported 48 batches of gold in the first eight months of this year worth $15 billion dollars, which roughly translates to 380 tonnes. Unfortunately the article does not say where this gold came from, but it very well supports the fact China continues to import large amounts of bullion, which can be seen by strong SGE withdrawal data. in September import has increased 30 % m/m.
The strange thing is, there were many industry professionals and journalists in the room when Xu spoke at the LBMA forum (click for the delegate list), but only one of them rushed to his laptop during the break to share the content of Xu's speech, paramount information. He sent me an email that I immediately published for the whole world to read. This person was my friend and CEO of BullionStar, Torgny Persson.
However, there still hasn't been a single mainstream news outlet that has covered the immense discrepancy between the Chinese demand numbers from the WGC and the SGE. I would like to express my deepest concern about how the mainstream media is covering the (Chinese) gold market. Xu stated, at the most prominent precious metals forum in the world, Chinese gold demand reached 2,000 tonnes. How could the press have missed this? By the way, later on in his speech he repeated it twice!
Earlier, I have reported on the data that physical gold consumption in China’s gold market has, in effect, reached more than 2,000 tonnes last year. All of you here are experts in this industry and are very clear about the percentage accounted for by these 2,000 tonnes of physical gold in the global market.
The difference between WGC and SGE Chinese non-government gold demand is 1,000 tonnes. Go figure.
The first publication I posted about what Torgny emailed me from the LBMA forum can be found here. In the comment section underneath there is a conversation with Bron Suchecki who also listened to Xu's speech, however, he (and one other journalist) couldn't recall Xu saying Chinese demand hit 2,000 tonnes. Fortunately we have it in black and white now; Xu said it three times and other SGE officials have made the same statements.
I would recommend everyone to read the entire speech from Xu (here).
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Koos Jansen was right...
So much for the SGE breaking the comex...
Premiums are falling on AGE but retail looks ripe for a bottom.
the SGE doesn't have to break the comex. they will go the way of Kodak soon enough.
big news boyz n girlz.......checkmate Chinese style
Trust your local Goldman Sachs to pay your GLD shares in gold.
Muahahaha!
Is it just me, or does your stack look a little shinier too???
Trust your local Goldman Sachs to pay your GLD shares in gold.
Yeah.....you'll take the check and like it.
To me, the big question is, why doesn't this 2000T impact price?
What sort of backroom deal sells this much physical
metal in a down market? Is this some kind of pay off for China
sucking up all those soon to be worthless FRN's?
This kind of thing is why I"m not heavily invested in PM's.
The big boys own most of it; enough to set prices.
Yeah Yellen is printing strength into the dollar.
King dollar!
Gold should definitely drop on this news...
I'm sure they've hooked up the M-5 algo computer this weekend. No need for humans. What could possibly go wrong?
http://en.m.wikipedia.org/wiki/The_Ultimate_Computer#/image/File:STUltim...
The 2000 tons are only the Chinese population requirement . How much the Chinese government buy ?
The total world production is 2700 tons . It would be interesting to know
if between China and India's population requirements the figure of 2700 ton was exceeded !
"If you can't put your hands on it, some homo is throttling it." Pretty sure that is what he said.
LMFAO.
Kudos to Koos who worked out from his own research the simple equation for wholesale demand before anyone else. Meanwhile the MSM propoganda (Planted by The Fed) continues to use exports from Hong Kong as the basis for making the claim that "Chinese demand for Gold is collapsing". Pathetic really....
Incidentally, Koos also recently confirmed, based on reliable sources, that PBOC does NOT buy Gold for reserves through the SGE. Koos had long speculated that to be the case because PBOC wants to recycle its USD reserves into Gold. SGE is RMB based so only buying Gold offshore would serve that purpose, Now confirmed.
So that means that TOTAL Chinese Gold demand in 2013 (Wholesale plus PBOC) was probably of the order of 2,500 Tonnes. As Ruprecht would say, "That's a lot".......
turd ferguson interviewing koos hensen
http://www.youtube.com/watch?v=-i8Y3SQJZY8
turd ferguson interviewing koos jensen
http://www.youtube.com/watch?v=-i8Y3SQJZY8
Pretty amazing how only a handful of people have any interest in reporting and researching what may be the seminal event in the demise of the West.
Barbarians !!! All 1.4 billion of em !!!
It's sophisticated to like the dollar.
Damn Straight ! and we also know how to launch a lifeboat properly !!!
Seems strange to now mention it 3 times?
cool. wait till they release what the govt has. they will do that and double the price of gold then tell the lbma if they don't like it, arbitrage it!
This is going to escalate quickly. Game on.
I bet maritime insurance in China is through the roof! With all the boating accidents going on....
Hmmmmm, I wonder if Gold and Silver get etched and discolored when submerged in Chinese rivers and lakes?
Anyone know how they would react in the levels of polution?
I believe the material gets impregnated with Tungsten.
Yep. It wouldn't react at all, that's why it's a noble metal.
They will soon own us. Even the peasents.
bah. Øsurper will just throw don another Red Line. Problem solved. Besides, the US has so much gold on hand...
OK, well they should as they hold vast amounts for so many nationsand refuse to return any of it to them; another nice ploy by the Gov.
Fractional reserve gold storage??? WTF
Ancient relic
Why not? We have Fractional Reserve Gold ETFs
What if domestic demand can be satisfied by gold production safely in the hands of Western interests, while the real productive assets gotten by fractional reserve against the pre-existing gold satisfies the demand for other things and generates in that way, wealth? It seems such a solution would be the kind of out the FED and it's allies would be looking for...
I don't say that spoil anyone's parade. I'm entirely sympathetic to real math and acknowledge the existence of scarcity. Just have to play Devil's Advocate cause I'd rather those in the real math and scarcity existing camp to not make any compromising mistakes...
2000 tonnes a year a year for China and India is being left in the dust.
So the total world demand for gold is already way over the production availability. Excess must be coming from the last of GLD and Fed vault floor sweepings at this point. It's going to "Shock the world' when this gets around that Sprott was right.
India's CB agreed to give up their own holdings (550 tons?) to supply domestic demand, and replaced it with 550 tons of paper gold promises from London, plus the key to the LBE executive washrooms (with the understanding that they will check them hourly, and keep them spotless).
Go Shanghai.
That's a lot of gold.
Will gold help against ebola ?
Yes . Paper bribes are not worth ...
Though the Chinese will take credit for the poor man's Hazmat suit (Mongolia is part of China by their reckoning)
This has been historically battle proven . It might save some lives Regards Andre xxxxxxx http://andreswhy.blogspot.com/2011/07/rotting-clothing.html https://www.academia.edu/8743634/Ancient_Mongolian_Hazmat_SuitEbolma made a deal with the Chinese: You buy our treasuries and we'll depress the gold market for you to buy it all up, lock, stock and barrel.
looks like the chinese have reneged. they don't seem very interested in treasuries any more.
1.2 Trillion Dollars begs to differ. I will say you are right the pile of paper is slowly decreasing. And my ass you can't trade RMB for dollars and do stealth deals on the Shanghai. Just not with huge positions. This be crazy shit. 6.06
The deal was not to buy any more Treasuries. It was to not dump their previous purchases.
Probably because the U.S. does not have a lot of gold left.
And the Grasshoppers of the West are doing what?
Hop for your life ! Here come the chickens !!!
The last thing that Hopper saw in "A Bug's Life..."
So how much of it is going to the CB's reserves? My understanding of this article is that the entire quantity of 2197t is used by private citizens, and probably includes industrial use. That can't be right.
WGC was 100% Wrong. Somebody call Sprott.
So they bought all the gold supplied by mines, no big deal right, nobody else wants it. I see more clearly now the wisdom of those arguing that current price is just a reflection of supply and demand dynamics.
You can bet that is why India was put on Gold restriction last year and not about their current account deficit.
Hope China, doesn't corner the market before I get the pound or two!!
might come in handy
Hey them chings replicated the US financial and banking systems in 5 years! Gotta give them credit. And wait till they will set the price of gold cause the US aint got none!
If the Chinese government accumulation was not coming from mine or scrap or other SGE withdrawals, and maybe not via HK either, then it could have been imported directly to Beijing by air from abroad and maybe from eastern Russia by land. So look at gold export stats from Philippines, Japan, Russia etc and also Australia, Nevada, Switzerland, even India, Nepal, Bhutan, Dubai, Saudi etc
Nothing like selling them back the Rape of Nanking. I wonder how many of those planes layover in Manila before they hit Shanghi?? 6.06
Going back to Shanghai tomorrow, will check in at the multi-level "gold mall" which was entirely empty during my last visit, it's at Yuyuan Garden.
Empty as in: no customers or as in: no gold?
We already know your report. No one's buying like the last 100 times you "reported".
PBOC could also be accumulating via Purchases from BIS, BOE and Fed and is rumoured to have 500 tonnes in FRBNY. PBOC could also be accumulating via non transparent accounts using ICBC and other commercial banks. It all adds up, 50 tonnes here, 25 tonnes there...
With levies on Aussie coal the tit for tat may be an Aussie levy on gold to china...
So that's why the price of gold will keep tanking, right?
unless you are a seller, WHY SO SERIOUS! hahaha.
Keep stacking.
If they really have all this demand they are much cleverer than any western-oriented democracy.( exclude Switzerland because they are going to vote if the central bank will have to back up every SF with at least 20 % of gold)
And nothing will IMHO beat the Dollar harder than a currency backed by gold or other PM. Maybe it's time even for the big infallible banks to bother about their mountains of debts in USD.....
But before that I still do not hold my breath. It may take much longer than anyone can know now....
SGE + HKG + SGPMX + New SING GP (25kg)..... + INDIA.......
yeah the numbers are pretty chunky and liekly to get bigger .... esp the new 25kg part..
This is bullshit we all know it..... with demand like this and leasing so rampant no body knows who owns what.... no wonder everyone wants to hold it.... GET IT WHILE IT's ON SALE!
mmmm shiny!
Mr Koos Jensen. Not to worry that the Sheeple take no notice of this major news event. I rely on your excellant analysis of the China gold market and check on your site regularly for updates. Keep up the outstanding work. It is a thankless job but I for one appreciate all you do. You have been instrumental in busting apart the gold narrative.
How embarassing this is for the WGC and Bron Suchecki from the Australian mint! A blogger has been capable to count 1+1 together what these overpaid "experts" aren't capable of.
And he is paid the flight and to attend this conference and then he overhears the most important fact, although mentioned three times? Can anyone imagine that such an incompetence would be accepted for a supermarket cashier? If someone prefers to look dumb and completely incompetent instead to admit how totally wrong WGC's numbers have been, then I know everything what purpose he really serves...
We know have the proove. Thanks to the Chinese and Mr. Xu!