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China's President Confirms Practice Of Moving Official Reserve Assets To Other Entities In China
By Louis Cammarosano of Smaulgld
- Shanghai Gold Exchange withdrawals were 65.681 tonnes of gold during the week ended September 25, 2015.
- Total gold withdrawals on the Shanghai Gold Exchange year to date are 1,958 tonnes.
- Withdrawals on the Shanghai Gold Exchange are running 37.2% higher than last year and 17.88% higher than 2013’s record withdrawals.
- Hong Kong gold kilobar withdrawals pass 565 tonnes in 2015.
- Chinese President Xi Jinping admits “some assets in foreign exchanges were transferred from the central bank to domestic banks, enterprises and individuals”
Shanghai Gold Exchange
The Shanghai Gold Exchange (SGE) delivered 65.681 tonnes of gold during the week ended September 25,2015. During prior trading week ended September 18 2015, the SGE withdrawals were 63.22 tonnes of gold.
The two week total of withdrawals is 128.90 tonnes of gold and the year to date total is 1,958 tonnes, for an annualized run rate of approximately 2,650 tonnes.
Shanghai Gold Exchange vs. Global Mining Production
Total global gold mining production in 2014 was 2,608* tonnes. The volume of gold withdrawn on the Shanghai Gold Exchange this year is pacing to be about 2,650 tonnes or roughly equivalent to the total global mining production of last year. This leaves little or no mining supply to satisfy global gold demand in India (expected 2015 gold demand of about 1,000 tonnes) and the rest of the world.
Shanghai Gold Exchange and HongKong Kilo Bar Withdrawls vs. Global Mining Production
Through September 25 2015, Shanghai Gold Exchange withdrawals are 1958 tonnes and through September 30, 2015 Hong Kong Kilo bar withdrawals (see below) are 565 tons.
Combined year to date the withdrawals on both exchanges are 2,523 tonnes through the first nine months of 2015. Modest projections could take the combined gold withdrawals from Hong Kong Kilo bars and the Shanghai Gold Exchange to 2,900 tonnes in 2015.
Shanghai Gold Exchange Withdrawals vs. Comex Deliveries
In “Silver and Gold Short and Long Positions on Comex” we noted:
Comex is a place where banks trade gold and silver they don’t have to banks who buy gold and silver they don’t want.
These following two charts illustrate the point:
Two Week Withdrawals on the Shanghai Gold Exchange in September 2015 vs. Comex 2014
Withdrawals on the Shanghai Gold Exchange were 137 tonnes during the two week period ended September 18, 2015, compared to just 85 tonnes delivered in all of 2014 on Comex.
Shangahai Gold Exchange Withdrawals vs Comex Deliveries of Gold 2008-2015
The chart illustrates that paper market vs. physical market natures of the Comex and Shanghai Gold Exchanges.
China is becoming the center of the Asian gold world. A $16 billion China Gold Fund was announced in May and the Shanghai Gold Exchange continues to establish itself as viable competitor to the gold trading centers in London and Chicago. China’s gold imports, trading and mining production are one of the cornerstones of China’s de-dollarization/Yuan strengthening initiatives that focuses no so much on selling U.S. Treasuries but creating alternative financial systems like the Asian Infrastrucure Investment Bank.
China is widely believed to be making a play for inclusion in the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs) Program later this year. If China fails to gain inclusion in the SDR, its recent initiatives to strengthen its currency and gain greater acceptance of the Yuan may provide a strong alternative to the IMF regime.
China Updates its Gold Holdings
China recently announced their first update to their official gold holdings since 2009. The People’s Bank of China announced that their gold holdings had climbed from 1054 tons to 1658 tons, making China the fifth largest gold holding nation in the world.
China chose to incude six years worth of gold accumulation (over 600 tons) all in the month of June.
Last month China reported that they added 19.3 tons (610,000 ounces) of gold to their reserves in July bringing their total to 1,677 tons (53.93 million ounces). Earlier this month the PBOC updated their August gold reserves, indicating that they had added 16 tonnes of gold to their reserves, bringing their total to over 1693 tonnes.
Chinese gold reserves grew by 16 tonnes in August.
China’s recent update to its gold holdings put it in fifth place among gold holding nations.
Many suspect that China has far more gold than they have reported. Click here for an explanation on where China’s gold might be.
Chinese President Xi Jinping recently confirmed the practice of moving the People’s Bank of China’s reserve assets to other entities in China: “some assets in foreign exchanges were transferred from the central bank to domestic banks, enterprises and individuals” This might explain where some of China’s gold hoard, that many suspect they posses but have not reported as reserves, may be located.
* * *
How does all that gold get to China?
The Bank of China also recently joined the auction process at the London Bullion Market Association where the price of gold is determined.
In addition, the Chicago Mercantile Exchange futures contract for Hong Kong Kilobars has experienced withdrawls of an average of more than five tons of gold a day since it began in mid March earlier this year. As of September 30, 2015, over 535 tonnes of gold have been withdrawn pursuant to this program since March 2015 for an annualized run rate over 1,200 tonnes of gold a year.
COMEX Hong Kong Gold Kilobar Withdrawals Through September 30, 2015
Comex Hong Kong gold kilo bar withdrawals have passed 565 tonnes since March 2015 and passed 18 tonnes on three trading days in September.
The Bank of China also recently joined the auction process at the London Bullion Market Association where the price of gold is determined.
China is the world’s largest gold producer:
China is the world’s largest gold producer with mining production over 2,000 tons the past five years. China has mined 228.7 tons of gold during the first six month of 2015.
Volume of Gold Withdrawals on the Shanghai Gold Exchange
Shanghai Gold Exchange Withdrawals for the week ended September 25, 2015, were over 65 tonnes.
The volume of withdrawals of gold on the Shanghai Gold Exchange as of September 25, 2015, is running 37.2% higher than 2014 during the same period and 17.9% higher than 2013’s record pace.
Withdrawals of gold as of September 25, 2015, on the Shanghai Gold Exchange are running 37% higher than last year and 18% higher than the record pace set in 2013.
In addition to the vibrant Shanghai Gold Exchange and increasing world leading gold mining production, China is also the world’s largest gold importer. Here is a chart showing the volumes of gold traded on the Shanghai Gold Exchange vs. gold imported through Hong Kong as of July 2015.
China also imports unreported amounts of gold through Shanghai.
* * *
All charts, other than those labeled “Smaulgld”, courtesy of Nick Laird.
*Gold Mining Production Source:2014 Gold Year Book published by CPM Group. There are various estimates of global gold mining production ranging from 2,600 tons to 3100 metric tons.
Shanghai Gold Exchange Data source GoldMinerPulse
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So China is liquidating US paper to float its economy. The more it sells, the more purchasing power is being drained away. From the USD. This selling will lead to higher world dollar velocity which will lead to an uptick in inflation and devauation. Which begets more velocity. And then a full on bank run on US paper which is hyperiflation.
Someone should tell Marc 2 Market this.
W T F ??? and yet the PoG continues to drop.
Fucking bankster crooks in action I suppose.
I may be wrong but it appears that silver and platinum are leading the way with true price discovery which is reflected in the premiums to actually get physical. Paper manipulation will work until it just doesn't anymore.
Several critical points not even mentioned:
not too fast China, not too fast (thanks for all the years thus far)
stackers are still stacking
This upsets you?
Buy gold and silver every chance you get. Just do it.
Since the "price" of gold is set in a paper derivatives market, it has no connection with reality.
Yes, it means there is no true price discovery because they can "Print" as much paper Gold as they want so there can never be a "Supply" problem, so supply and demand are irrelevant in the paper markets where physical deliveries are insignificant. The main purpose of the paper markets as they are set up is to allow CB's, through their BB Agents, to manipulate the prices of PM's as an instrument of what we see as fraud and they see as "Monetary Policy".
I fail to see how it matters which entity has the gold. If it is in China's border it can eventually be used for China. No confiscation is needed. The chinese people could just turn their gold to local currency and the government could use that gold to settle trade issues.
The idea that the central bank of china is going to use gold to 'back' a currency is insane.
It is far more likely it would hold gold, exactly as the ECB does, as a reserve asset.
The gold standard simply is never coming back...not until we recover from Mad Max anyway, if that happens.
Modern monetary systems won't use gold at a fixed price. It will float at market rates...unmanipulated...eventually.
Float against what? Debt based fiat currency simply can't exist when there is price discovery in Gold, hence the present fraud. FOFOA's ideas are ludicrous.
Nobody who is serious about free market money wants a state mandated Gold standard. Free market Gold money simply needs to be measured by weight and purity, not by dollars. This removes the potential for bumfuckery.
FOFOA is a statist. Get a new guru.
Talk about " stating the Obvious "!!!
No one even looked at SGE withdrawals until Koos Jansen started his investigations. He deserves the credit for this tremendously important data revelation. No thanks to the World Gold Council which is a bankster liar organization.
To be a real asset it MUST be a productive asset or valuable to a productive asset.
... anything else is bullshit. Circumstances change and so those things that meet the definition of a real asste change as well.
The interesting point for me is the quiet admission that central bank gold is being transferred to INDIVIDUALS.
Now what kind of individuals do you suppose they are?
And where are they taking their newly un-governmental gold to?
Across the street to a vault in some other state-owned Chinese bank? Don't make me laugh.
This is Bill and Hillary Chang leaving town with the silverware from the Forbidden City.
"Chinese President Xi Jinping recently confirmed the practice of moving the People’s Bank of China’s reserve assets to other entities in China: “some assets in foreign exchanges were transferred from the central bank to domestic banks, enterprises and individuals "
Exactly Tarabel: Transferring is NOT selling.
The Chinese Oligarchs have basically admitted to looting the PBOC.
X10000000
This right here should be the main point taken from the article. The spin on this shit show wasn't even WaPo worthy.
China admits it 'transfers' the peoples gold and other assets to local banks (not terrible but not good) enterprises (WHOOOAAA!) and induviduals (DAFUQ!) So Chinese president just admits it steals gold from the PBoC and gives it the fuck away...
I bet the NSA know exactly which Party Officals have taken the "gold".
meh.
it's not like they're actually going to back their currency with gold.
It's all a hedge - all the fiat is dying....
In the great reset whomever has the most physical AU or AG has the most bargaining power.
The nuance that escapes a lot of gold analysts is this and it's all very logical if one examines the graphics in this excellent article carefully:
1 China's official Gold reserve from 2009 to 2015 is declared at 1693.25 MT.
2 China's gold production from 2000 to 2015 (6months) is aprox 3,808 MT.
Since China's gold production remains in China and is only sold to the Govt then by a simple addition of the two amounts, China's gold reserve is not less than 5,501.25 MT, the second highest in the world, ie if there is any gold left in Ft Knox, which has never been audited since 1976.