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Gold Bullion Demand In 'Chindia' Heading Over 2,000 Metric Tonnes Again
Gold Bullion Demand In 'Chindia' Heading Over 2,000 Metric Tonnes Again
- Shanghai Gold Exchange deliveries at 73.289 tonnes last week
- 3rd largest week of gold withdrawals ever on SGE
- Both China and India heading for over 1,000 metric tonnes in 2015 … again
- India imports 96.1 tonnes in May alone
- 'Chindia' imports 296.55 tonnes in May - 14% greater than global production
- South Korean gold demand surges in wake of Chinese crash
- Asian and global gold demand robust contrary to anti-gold narrative
The recent lower prices in gold have not deterred investors internationally from buying gold coins and bars in large volumes again. Indeed the Perth Mint and the US Mint are struggling to fulfill demand for gold coins and bars.
This is particularly the case in the eastern hemisphere - especially in India and China - where demand has again increased significantly on price weakness.
Between them, these two countries are on-track to import 2,000 tonnes of gold this year - that is more than two thirds of the total annual global gold mine production, which is set to be about 2,800 tonnes this year.
The Shanghai Gold Exchange, which deals exclusively in physical bullion, saw buyers take delivery of over 73 tonnes of gold last week, the third largest withdrawal on record. This follows two weeks of steadily increasing demand as investors pull or attempt to pull money out of the Chinese stock market.
Demand out of China is on track to surpass last year’s official figure of 974 tonnes and may reach 1,000 tonnes this year. Chinese demand has been steadily growing, with the encouragement of the government. The ban on gold ownership imposed by Chairman Mao in 1949 was lifted in 2003.
As such, demand from the nation of 1.3 billion people who have a strong cultural affinity to gold - and experience of monetary mismanagement and hyperinflation - has been rising from a base of nearly zero and has recently surpassed that of India to become the world's top gold buying nation. Nonetheless, Chinese gold ownership remains very low when compared to that of India.
Prudent Indian households hold 11% of the world's gold. That is more gold than the gold reserves that the U.S. Federal Reserve, the German Bundesbank and the Swiss central bank are believed to own put together.
Indian demand remains robust. In April and May alone the country imported over 155 tonnes of the precious metal.
Demand so far this year has greatly exceeded that of the same period last year - up 61% - as Indians take advantage of the low prices despite the fact that we are some months away from the typical gold buying season. Indian demand is also expected to hit 1,000 tonnes this year.
Together, “Chindia” imported 296.55 tonnes of gold in May. This surpasses current monthly mine supply globally by 14%. Clearly there is an imbalance in the gold market when demand from two countries alone exceeds total mine supply, which must then be supplemented by existing stocks.
Yet prices remain in a downward trend as speculative short selling continues to depress prices. Indeed it not just the huge Asian nations of China and India where demand remains high. There are reports of strong demand - including by the Perth Mint - in Thailand, Vietnam and Malaysia. Demand for gold in South Korea has surged in recent weeks, according to Reuters.
Koreans, nervous about the fallout from the crash in China’s stock market, are choosing to diversify into gold and take advantage of lower dollar prices.
This trend is likely to be repeated across east and south-east Asia in countries who are reliant on the increasingly important Chinese economy.
While it is unlikely to have significant impact on global demand - last year’s demand from South Korea amounted to only 17 tonnes - it demonstrates the psychological appeal that gold still has in times of economic crisis among people across the world - and especially in Asia.
The triumphalism with which some Wall Street commentators have covered the temporary set-back in gold prices looks misplaced and misguided. This is especially the case when the bigger picture is taken into account - including the significant macreconomic, systemic, geopolitical and monetary risks of today.
These are being ignored for now - as they were in 2007 and early 2008.
Gold will continue to retain value well into the future - a claim we would not be too confident about making with regards to paper currencies and bonds issued by the most indebted nations in the world.
Own allocated, segregated gold coins and bars of which you can take delivery.
MARKET UPDATE
Today’s AM LBMA Gold Prices were USD 1,085.00, EUR 996.05 and GBP 694.56 per ounce.
Yesterday’s AM LBMA Gold Prices were USD 1,086.50, EUR 1,000.18 and GBP 697.82 per ounce.
Gold and silver on the COMEX were nearly unchanged yesterday - down $3.20 and up 1 cent respectively - to $1,085.00/oz and $14.60/oz.
Silver futures for September delivery fell less than 0.1 percent to $14.66 on the Comex.
Palladium for September delivery rose 0.8 percent to $602 an ounce on the New York Mercantile Exchange. Platinum for October delivery rose 0.3 percent to $955.90 an ounce.
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I like the Charts in this article, but have some questions.
Q: Why show Hedging by Mines in chart of Supply, since Hedging is just paper?
Q: Any problem with Demand and Supply Data from World Gold Council?
Q: For China are you counting both Main Land China and HK?
Q: World Gold Council shows Supply approx 4,000 Tons, and Demand approx 4,000 Tons, why does GoldCore.com show Supply around 1,000 Tons??
Q: Why mention Malaysia in article as a big Demander of Gold, when Thailand, Indonesia, and Germany are much higher Demand?
Table 4,
Global Gold Supply Tons:
Supply Gold Tons, for 2013, for 2014,
Mine production, 3060, 3135,
Recycled gold, 1255, 1175,
Total Gold Supply, 2013, 2014,:
Tons Gold supply, 4282, 4410,
http://www.gold.org/supply-and-demand/gold-demand-trends#full
Table 7, Gold Demand By Country for 2014, Tons:
Greater China, 1,051,
China, 974,
Hong Kong, 61,
Singapore, 22,
Taiwan, 16,
Indonesia, 63,
India, 811,
Malaysia, 19,
Thailand, 107,
Vietnam, 67,
Saudi Arabia, 84,
UAE, 66,
Egypt, 51,
Iran, 75,
Turkey, 117,
Russia, 75,
United States, 164,
Germany, 112,
United Kingdom, 33,
Switzerland, 48,
It appears that US paper still 'rules', but the sham that China is pulling with their, 'boo hoo, data', as to the collapsing Chinese stocks, should be regarded as nothing but a giant PR stunt to drive down gold and other metal commodities for the AIIB, BRIC Bank and other institutions that the PBoC has controlling interest in. This is needed as defined in the new banking order that China - Russia has proposed and is implementing, trade that is backed by physical commodities that are bank held. I'd like them to do a major call on the CME scam as a final 'coup d’ etat'.
Personally, I’m buying only minted old gold, mainly due to the Frank-Dodd provisions.
What does Frank-Dodd say about gold?
The world could go on a gold standard if needed although I prefer freegold instead but:
World Population 1900 , 1.8B, total gold in existence - 24,000 mt or about .42oz per person
World population 2000 , 6.0B, total gold in existence - 165,000 mt or about .88oz per person
Most of the world was on a gold standard in 1900 but in 2000 there was over 2X as much gold per person with no gold standard.
Conclusion: With twice as much gold available per person there is no reason we could not use gold again as a standard, with silver also of course.
Screw the gold standard. MAke gold a value by weight only against the world's currencies. Giving gold a dollar (currency) value has never ever accounted for the greed of bankers and politicians, when they collude with each other. Reverting back to that invites another toay, total anarchy by bankers and government workers.
OK by me.
I always want to ask how gold can meet the financing needs of USA and other countries. Maybe I asked this question this week some place else.
Anyway I'm not smart in finance or gold.
If gold value goes up to $1 Million dollars an oz, I guess I could see how a high value per oz could be used to finance new buildings, airports, highways, bridges, ports, factories, and new businesses.
Gold values paper currencies. Look at a $20 gold piece. It costs you $100 or there abouts to buy 1 oz. You're not buying $20, you're buying an ounce for 1100 paper IOU's. They used to be exchangeable fo 20 paper dollars. That's a huge reduction in the peuchasing power of the paper you work for.
Watch Paul Grignon's Debt as Money on Utube. or Thre Hidden Secrets of Money by Mike Maloney. Both will blow your mind and if you have any kids old enough to leard, about 13 years and older, show them as well (Paul G's) and introduce them to friends but I warn you not to get evangelical with them. Just show them.
In answer to your question, how can gold finance the needs of the country, you only need 1oz to have a value of $1 Trillion dollars. In Zimbabwe, I shudder to think what 1 oz would have demanded.
Money needs to have a measuring stick for value. Watch and learn and you will see that gold rises in value (not price) the more we create as wealth. One ounce could buy it all, as happened in Zimbawe.
Check your numbers again. China alone is set to go over 2000 tons this year.
http://lawrieongold.com/2015/07/18/huge-latest-week-sge-gold-withdrawal-...
And that doesn't even include the latest 73 ton spike.