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How The World Is Being Fooled About Chinese Gold Demand
Submitted by Koos Jansen of Bullionstar Blogs
There is a story being told to the masses about Chinese gold demand that is grossly incorrect. The huge discrepancy between numbers from the World Gold Council (WGC) and actual gold demand is so wide yet cunningly hidden I must conclude there is essential information about physical gold demand deliberately kept privy.
Let’s go back to April 2013; the price of gold made a nosedive, which spawned an unprecedented physical buying spree across the globe, most notably in China. Withdrawals from the vaults of the Shanghai Gold Exchange (SGE), that equal Chinese wholesale demand, closed at 2,197 metric tonnes December 31, 2013, up 93 % y/y.
However, the WGC (the global authority on gold) initially stated Chinese consumer gold demand had reached 1,066 tonnes in 2013, an astonishing 1,131 tonnes less than wholesale demand. In the China Gold Association (CGA) Gold Yearbook 2013 it was disclosed China had net imported 1,524 tonnes and domestically mined 428 tonnes. Without counting scrap supply this adds up to 1,952 tonnes; adding scrap total supply has been well over 2,000 tonnes. It’s impossible consumer demand was only 1,066 tonnes.
Finally the WGC admitted their initial estimate of 1,066 tonnes of Chinese gold demand was grossly understated. By email they wrote me on February 12, 2015:
Dear Mr Jansen,
Thank you for emailing the World Gold Council, we apologize that your previous enquiry was missed.
Our figure for Chinese consumer demand in 2013 has since been revised upwards to 1,311.8 tonnes from the original figure of 1,066 tonnes published in the full year 2013 Gold Demand Trends report.
That’s an increase of 23 % by the largest physical buyer on the planet. Although still far from actual demand, 23 % is quite a revision. Was there an official press release from the WGC to inform the world on this revision? No (I’ve asked the WGC, but I got no reply). Did the mainstream media properly cover the 23 % revision? Not that I’m aware of.
Actual Chinese gold demand 2013 has been knavishly hidden from the masses (99 % of the financial industry copies WGC numbers).
In 2014 the WGC again grossly understated Chinese gold demand. SGE withdrawals accounted for 2,102 tonnes, though the WGC stated Chinese consumer demand was only 814 tonnes. Again, a gap of more than 1,100 tonnes. All arguments the WGC has brought up to explain the surplus in the Chinese gold market can only make up about 15 % of the gap (gold-for-gold supply and stock movement change).
For 2014 grossly understating Chinese gold demand wasn’t enough for the Council to distract the world’s eye from China’s gold hunger; more was needed. By a few tonnes the WGC put India’s consumer gold demand ahead of China. In their Gold Demand Trends Full Year 2014 Indian demand is disclosed at 843 tonnes, transcending Chinese demand (814 tonnes) by 29 tonnes, just enough. Most media simply copied these numbers and are stating India is now the world’s largest gold consumer – no critical thoughts added. In my opinion this is the biggest fallacy in finance of our time.
In 2014 China imported at least 1,250 tonnes and domestically mined 452 tonnes. According to GFMS scrap supply was 182 tonnes, adding up to total supply at 1,884 tonnes. But, we’re supposed to believe India is the largest gold consumer on earth at 843 tonnes? Yes.
I’m open minded towards the possibility there is an agenda that is allowing China to buy as much gold for as little fiat as possible to make them accumulate whatever necessary before a monetary reset. I see no other explanation for the events unfolding in front of our eyes.
Can you imagine what would have happened to global gold sentiment if the WGC had disclosed 2013 Chinese demand at 2,100 tonnes and 2014 Chinese gold demand at 1,850 tonnes? Sentiment would have been influenced to say the least.
As I wrote in my first post on why SGE withdrawals equal Chines wholesale demand September 18, 2013:
If you think about it, the redistribution of gold is the only logical thing to happen given the state the world economy is in. … gold has to go to China in order to equalize the chips.
More Awareness About Chinese Gold Demand
Luckily my camp is growing. More and more analysts are using SGE withdrawals as a proxy for Chinese wholesale demand instead of inaccurate WGC data. CNC Asset Management wrote in a newsletter September 25, 2014:
To understand China’s real physical gold demand, investors should simply look at the weekly withdrawals from Shanghai Gold Exchange vaults. We visited the Shanghai Gold Exchange (SGE) in May and talked to the senior executives of the exchange. After reviewing the exchange’s trading mechanism, we are of the view that the weekly withdrawal figures provide a much more accurate data series that reflects China’s aggregate wholesale demand in a timely way.
More recently MarketWatch published SGE withdrawals and its significance, and Dr. Martin Murenbeeld, Chief Economist at Dundee Capital Markets, wrote in his newsletter on February 2015:
It follows from this opaque picture of Chinese supply and demand that some observers, including ourselves, have decided Shanghai Gold Exchange (SGE) deliveries data provides the best window on what might be happening on the demand side in China. (There are a number of observers who have noted the widely circulated estimates of gold demand are woefully inaccurate, precisely because these data are so significantly lower than SGE deliveries data.)
Latest data from the SGE shows withdrawals in the last five days around Lunar Year (February 16, 17 and 25, 26, 27) accounted for 38 tonnes. Total SGE withdrawals in the first two months of 2015 surpassed 410 tonnes. SGE withdrawals Q1 can reach 550 tonnes or more. However, don’t expect Chinese gold demand published by the WGC on Q1 to be anywhere near these figures.
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The golden rule: he who has the gold, rules.....China
In April PMs will begin their assent to levels even those of us who believe are going to find it hard to believe
Zorba has spoken (posted) Stack now.
Face the facts, your gold investment have been losing money since 2011. 5 years now. There is still time to cut your losses short, before the plunge.
Forget the golden rule, the platinum rule basically says: whenever and wherever possible, Bernank and Yellen will sell 10,000,000 toz at market during illiquid hours.
My gold investments started when gold was $350 and I went full in at $465. Added on from $600 to $800
and have been living large since supporting 3 households even though I retired at the end of 2010.
OK facts are facts. I'm only up 400% since 2000.
So when do they run out of physical Gold or silver?
That question has ruined some people's reputation.
In terms of known mineable supply? 2050 to 2065.
....... are there any mines operating right now...... I mean other than Goldrush Alaska/Yukon/butfuk somewhere
Famous quote by Bill Cipher
"Remember! Reality is an illusion, the universe is a hologram, buy gold, bye!"
If you do not know who bill cipher is refer to the show called gravity falls
..... yeah but it's like real estate man it always comes back right??
I think I'll take my chances with PM's over the WS BS or urban RE or any of whatever GS is pumping......... ya know 'cause of that whole supply demand thing.....
....everybody talkin' bout chinese demand ...... india biotches
......now back to our regular scheduled event....
https://www.youtube.com/watch?v=ISmgOrhELXs
'I’m open minded towards the possibility there is an agenda that is allowing China to buy as much gold for as little fiat as possible to make them accumulate whatever necessary before a monetary reset. I see no other explanation for the events unfolding in front of our eyes.'
You ain't the only one.
http://redefininggod.com/nwo-schedule-of-implementation/From DaveO's link: "Second half of 2016:
> In the aftermath of all the economic turmoil caused by the Fed Mistake, Ron Paul (or possibly his son Rand Paul) will be elected President. He will lead America’s retreat from its leading role in the world so the BRICS-overhauled UN Complex can take the lead. And with that, the Rockefeller/”elite”-planned New World Order will be in place."
So, beware the election of the man who is not running, or his non-establishment longshot son, lest the end be nearer?!? You might want to lay down the pipe there Nostradamus.
"...still far from actual demand, 23 % is quite a revision."
Wi Tu Lo.
Sssssssooooooooo looks like Fulford and Wilcock are right about this after all.
Some wacky shit here....
Board of Governors of World Bank and IMF announce transition to asset-backed currencies"The Board of Governors has filed Financing Statements with the Secretaries of State in the 12 states where the Federal Reserve Banks are located to secure this debt. National debts are going to be offset against the indebtedness of the Federal Reserve."
aaayup.
http://presswire.com/content/1324064/board-governors-world-bank-and-imf-...
hahha karen hudes.... thinks the jesuits stole all the gold... she needs to be locked up for her own good
Gold and Silver !!!!!
Get it while you can.
So, they have about 20,000 ton by now, while Russians control about 6-7,000 as a minumum. My bet. ;-)
Sounds about right to me Jep
Wow. Finally ZH has published something Koos Jansen has written. He's well worth following and is a regular writer for Bullionstar blogs.
The WGC is a pitiful joke.
Exceded with ridiculous claims by Karen Hudes.
She was fired by the Fed because she refused to seek mental health treatment after it had been recommended by Human Resources.
I always think there's a big clue in the term 'Human Resources' regarding how much the organization you work for really gives a fuck about you.
The term is insulting, to say the least.
IF you are not absolutely out of your mind after seeing the enormity of the predicament which we face, along with the impossiblity for any hope of any solution to the abysmal situation, and, following that after you have that understanding, you follow your boss' direction to lie through your teeth about it every single day to the public, with a straight face, and you are capable of doing just that, THEN it is you who is mentally ill.
Furthermore you are beyond all hope of any recovery.
Understand?
Perception is not necessarily truth. It can be delusional.
Greenspan and his recent bullsih rants on gold is positioning himself get a gig with Gov't of China.
Greenspan is one of the best indicators of future market trends.
His words still reverborate through the global financial markets like no other.
It isn't common for Chinese to buy gold, except as jewellery. When I go to the bank here in Zhengzhou to buy it (you can buy it at any branch), the bank staff are always flabbergasted that anyone wants to buy the stuff. They ask me why I don't just buy a house instead.
Even 2000 t per year is only a little more than 1 g per person. The smallest gold bars are 10 g. The smallest jewellery bits (which are sold by weight) are a little more than 2 g, which seems a better fit for a country selling 1.3 g per person.
Of course, there are some who are buying gold in size.
Um... yes, the banks push it, but that's not where Chinese buy it. Chinese go to the gold markets like caibai. Go to caibai in the morning and you'll see a gold rush. Everything worth buying is gone in 2 hours tops. Caibai sells an average of ~400kg of gold a day in the main beijing store alone.
stop looking in your local bank branch at what retail buyers are doing.
Ma and Pa who owns a corner store are not the drivers of monetary PM demand, nor will they ever be.
You and Joe Sixpack are not the real PM market, you local bank store(that serves folks around the block) is not the real PM market.
What you are looking at and talking about is RETAIL.
The employees at the bank may not be flabbergasted once the PBOC loosens the peg on the yuan and allows it to weaken against the USD due to weakening of the Yen and slowing of the economy. Something to think about
It isn't common for Chinese to buy gold, except as jewellery. When I go to the bank here in Zhengzhou to buy it (you can buy it at any branch), the bank staff are always flabbergasted that anyone wants to buy the stuff. They ask me why I don't just buy a house instead.
Even 2000 t per year is only a little more than 1 g per person. The smallest gold bars are 10 g. The smallest jewellery bits (which are sold by weight) are a little more than 2 g, which seems a better fit for a country selling 1.3 g per person.
Of course, there are some who are buying gold in size.
Keep stacking.
With all the fuss over NSA spying .... why can't we get Hillbillary's Emails and Chinese Gold demand .... they only spy on the masses ?
One of these days,perhaps after a Chinese New Year,China will allow the Yuan to float against world currencies and reveal that the Yuan will backed by their enormous Gold Reserves....
If it is true that Chinese physical gold demand has been higher than reported or calculated by the WGC,
It should be reflected in gold price after a couple of years of accumulation.
So the question is, Where is the supply comming from that keeps the price depressed?
At some point the bugs are going to have to admit that several years of declining prices don't lie.
Unless the Chinese themselves are suppressing the price for a cheap buy in.
"So the question is, Where is the supply coming from that keeps the price depressed? At some point the bugs are going to have to admit that several years of declining prices don't lie."
The supply is coming from western central banks. Did you miss the queen touring the vault muttering "too bad this isn't all ours"? What about the FED reneging on returning Germany's gold? Ostrich much? Better wash that sand out of your ears. Declining paper prices do lie and that's precisely why they are doing it, to fool people like you. But I suspect you aren't really fooled. Better take some of that government disinfo paycheck for shilling and get some phyz while you still can ;-)
Silver For The People
Let's see, recent news that HSBC is closing 7 London vaults.
Shanghai exchange will participate in the gold fix as of March 20th.
Now, news that China's been stacking way more gold than reported.
Just a guess here...but could the Chinese have been demanding gold transfers in lieu of reimbursement for the treasury bonds they've been dumping?
Whatever the case, I believe the black swan event we've been waiting for will concern the price of gold skyrocketing quickly and in doing so, will bring about the demise of the dollar and all other fiat currencies...and then on to the NWO.
Just saying.
What's the point of keeping open vaults that are empty, unless you're trying to make people think they are full?
We're looking at you Fort Knox.
China already once lost their gold 6000tons? to japan... i wonder if china will ask nicely to get it back.
haven't thought about it much...but from what I know about the bad blood between China and Japan...I think China is planning for the day when they will open a giant can of woop ass against the Japs.
They are mortal enemies after all and if what you say is correct...then watch out, cause payback will be a major Chinese bitch !
And then the 6000tons have been moved to Fort Knox.
I do not like to speculate, where is that gold today.
China is the world's largest gold producer. nobody knows how much they really take out of the ground. Also, they have other routes into the country besides Shanghai or HK. They buy huge ships of rich ore and process it themselves. This doesn't get recorded.
I understand they are using the US bonds they have to purchase gold and other commodities. This gets them out of the risky American paper and puts them into something that will skyrocket in value when inflation comes back.
The Mechanics Of The Chinese Gold Market https://www.bullionstar.com/blogs/koos-jansen/the-mechanics-of-the-chine...