The Hoarding Continues: China Purchases A Record 100 Tons Of Gold In April From Hong Kong

Tyler Durden's picture

A month ago we were delighted to counterpoint Charlie Munger's prior remarks about the level of "civilization" of a given consumer based on their sentiment vis-a-vis gold, by demonstrating that Chinese purchases of gold from Hong Kong rose to a record. To wit: "Imports from Hong Kong were 135,529 kilograms (135.53 metric tons) between January and March, from 19,729 kilograms in the year-earlier period, according to data from the Census and Statistics Department of the Hong Kong government. Shipments in March rose 59 percent from February, yesterday's data showed." We have just gotten the April update, and, lo and behold, the country which is now the biggest buyer of gold, having surpassed India, just set a new record: "Gold imports by mainland China from Hong Kong climbed 65 percent to a record in April, advancing for a third straight month as investors sought a hedge against financial-market turmoil and an economic slowdown. Shipments totaled 103,644.5 kilograms (103.6 metric tons) in the month from 62,913 kilograms in March, according to export data from the Census and Statistics Department of the Hong Kong government today. In the first four months, imports were 239,174 kilograms from 27,114 kilograms a year earlier, according to Bloomberg calculations. China doesn’t publish such figures." In other words: in the first four months of 2012 Chinese purchases have increased by an unprecedented 782% over 2011.

And this is only from Hong Kong! Said otherwise: "Is the PBOC, which officially has just 1,054 tons of the yellow metal, quietly and relentlessly stockpiling gold?" Oh yes.

Expect a formal announcement from the Chinese central bank in the months ahead, indicating the country's gold hoard has increased by at least 100%. What happens then to the price of gold is rather self-explanatory.


Increased imports by the second-largest consumer after India may help extend a rebound in the precious metal that’s been driven by speculation the U.S. Federal Reserve may add to stimulus this month to safeguard the recovery. Spot gold rallied 4.1 percent on June 1 after U.S. jobs data missed expectations.


China’s central bank may also be boosting holdings, according to Wang Xinyou, a senior analyst at Agricultural Bank of China Ltd.


“The fundamentals are intact for a bull market in gold,”


Liang Ruian, head of commodities at Pinpoint Investment Advisory Co. “With so much economic uncertainty out there, the money-printing practice won’t stop. Central-bank buying is another bullish factor that shouldn’t be discounted.”


Immediate-delivery gold, which traded at $1,617.80 an ounce at 8:50 p.m. in Beijing, is 3.6 percent higher this year as investors and central banks bought the metal as a store of value.


Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, rose 1.5 percent in 2012, and central banks from Turkey to Kazakhstan added gold to their reserves.

And the kicker:

"We can’t rule out the possibility that the central bank is buying gold,” said Wang at Agricultural Bank of China, referring to the People’s Bank of China. The PBOC last made known its gold reserves more than two years ago, announcing that it held 33.89 million ounces, or 1,054 tons, as of June 30, 2009.

Rule out? You can bet on it. And when the press release is finally issued hold on to your gold hats folks...

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Transitory Disinflation's picture

I want to know how the chinese can eat it but we cannot!

fourchan's picture

few people know that all those american "we buy gold" places

smelt it down and ship it to the middle east and the orient.


americans are retards and i know because im one of them.

nope-1004's picture

A dangerous person is a person that knows just a little bit.  As well, an equally, if not more, dangerous person is the person that has lived their whole life only knowing ONE way, therefore inconsiderate of the potential negative to that ONE way.  Talk about being stuck in a rut.  That is how to best explain Buffet and Munger.  These two are complete fools, and will die fools watching their life-long hard work and fortunes evaporate, once this ponzi unwinds.

 In addition, Charlie Munger is a prick.


General Decline's picture

Why would Hong Kong sell?  Why would any body sell?

francis_sawyer's picture

I hope the Chinese are better boat builders than francis_sawyer...

Harlequin001's picture

'in the first four months of 2012 Chinese purchases have increased by an unprecedented 782% over 2011.' - aha, that explains the plunging gold price...

How did I not see this one coming?

SilverIsKing's picture

How much gold does Bernanke own personally?  I'm sure he's been buying too.

SilverRhino's picture

Tanks, Ballistic missiles and all kinds of infantry can get from China to Hong Kong pretty quickly.


Temporalist's picture

China already owns HK again.

Apostate2's picture

PLA already domiciled on Pokfulam Road and in the old Gurkha barracks in the NT. Keep a very low profile. 

Al Gorerhythm's picture

Gold is a buy and a bargain until this ship of fools realize that they are the ballast. When they run to the other beam (the gold side) she will list to overbought and then right herself. G'luk.

tenpanhandle's picture

HongKong is not selling the West is.  HongKong is just the freight dock on the way to China Bank.

Pladizow's picture

To give Munger some credit, they do eat dogs!

malikai's picture

I believe your referring to Koreans. Dog isn't really a Chinese thing.

Zeilschip's picture

To be fair, we have cheese with maggots... or frogs... can't decide what's more disgusting...

Apostate2's picture

AKA as 'big power' soup.

Apostate2's picture

Yes they eat dogs, paticularly the running ones. Street gaisi in Guangzhou have them skinned and prepped ready to fry. Outlawed in Hong Kong but you could still find a few 'secret' places around ten yrs ago. In the southwest they relish all sorts of wild things kept in cages outside the restaurants to pick and choose. In the far north they go for donkey dumplings. Northerners say southerners will eat anything including their mothers and fathers. Southerners don't like sheeple, the smell makes them swoon.

resurger's picture


2/24/1999 – Ron Paul responding to Alan Greenspan

Dr. PAUL: Thank you, Mr. Chairman.

Mr. Greenspan, a lot of economists look to the price of gold as an indicator and as a monetary tool. It has been reported that you might even look at the price of gold on occasion.

Last summer on a couple of occasions here when you were talking before the committees on securities and on derivatives you mentioned something that was interesting. You said that central banks stand ready to sell gold in increasing quantities should the price rise, which I thought was rather interesting.

Then I followed up with a letter to you to ask you whether or not our central bank might not be involved in something like that, in the gold market. And you did answer me and stated that since the 1930's the Federal Reserve has had no authority to be involved with the gold markets."


Nothin to see here...

Al Gorerhythm's picture

Great politician. He didn't answer the question. He just stated a fact of lawful constraint. Laws were meant to be broken, they say, and many have been. He didn't deny the practice. Have you broken any laws, Benjamin? Has the central bank been involved in any way in leasing or selling the nation's gold reserves, rehypothecating them, lending them, swapping them, guaranteeing them, pledging them or placing them at risk, directly or indirectly through subsidary banks or agents? Do we still have the reserves that you claim to hold, where are they held and why is it that a physical audit of the gold has not been carried out by an independent auditor in the last 50-60 years? Who has given you the authority to deny the people an audit of their gold? If you don't believe that the gold is money or an important asset in reserve, then why are you reluctant and obstructive in exposing the true nature of the reserves in gold? Why? 

Answer the question; the question Jerk.

Sweet Chicken's picture

americans are retards and i know because im one of them.


Post of the month already and it's only the 4th?! Not bad!

sunaJ's picture

I went into one of those We Buy places just out of curiosity last week - I ain't sellin' bitchez.  I asked what their Buy price was for silver (they don't sell, of course).  First, she quoted me the price in grams and for sterling.  I asked about pure in troy ounces.  She told me that she buys sterling at $10 and pure at $14.  Second, this 22 year-old twat told me she has no idea how "the computer" arrives at the price.  Then she had the nerve to get snippy at my incredulity.  We are morons.

Temporalist's picture

Just like the government doesn't want informed citizens, "We Buy" operations don't want informed customers.

Troll Magnet's picture

been to one of those "cash for gold" places myself with a maple in hand.  they offered 30% below spot price.  when i asked them why, the lady working there said, "because we have to make profits, too."  i thanked her and walked out with my maple, of course.  

prole's picture

These cash4gold places, including jewelry stores which buy gold should all have signs out in front "Only imbeciles should enter here"

Exception-- New York City. Things are different there sheople.

Estrella's picture

I wonder. I live in a small rural town and there are two "We Buy Gold" shops. One has a person wearing a "We Buy Gold" sandwich board constantly on the main road. I have walked up, once or twice, to the locked door (a person inside can press a button to open it). So, you say the gold is going to China? Probably.

Okay, quick survey, is this just an interesting "time"and two years from now we will be worrying about other matters, or, is this a real problem that will change our lives?

DoChenRollingBearing's picture

Be smart!  Be diversified!  Buy gold.

Central bankers are (typically) NOT stupid, and they are buying gold.  Not silver, not platinum (although I own some of each).  But most of my PMs are in gold!

Note that China will likely NEVER sell its gold.  As the big buyers accumulate, they will probably not sell.  If buyers want real physical Au and the big owners do not want to sell..., what happens?


Ahmeexnal's picture


CBs can't buy silver without sending huge shockwaves in the minuscule silver market.

Yet, China, the world's third largest silver producer, went from exporting, to IMPORTING silver.

Silver will always have major moves compared to other PMs, and the upcoming price explotion will be the talk of the galaxy for aeons to come.

DoChenRollingBearing's picture

It's OK with me if silver goes up even more than gold.  I have a decent amount of Ag too.



My Lexus won't get to 125...  Nice link Ahmeexnal!

Peter Pan's picture

There are three things to keep in mind.

Firstly, the amount that China is spending on gold is a pittance given her FOREX reserves.

Secondly, China is stockpiling just about everything.

Thirdly, they are happy to keep receiving dollars for as long as they cn still convert them to something better.

Gold will probably not make it back into mainstream consciousness because people are either broke and cannot afford to buy or else are too stupid to see its true worth.

hamurobby's picture

Firstly, yes, but its a start.

Secondly, yes.

Thirdly, yes and they should.

Mainstream will not factor nor matter because it wont be the indebted masses who will set the price once the CB announce they dont trust each other, the CB's will, there will only be casualties of humanity. (see history)

BooMushroom's picture

Average American makes 30k/yr. average savings rate is about 2%. That's about $50 a month. So they're gonna save fiat for 3 months or more, to buy one, 1/10 oz gold eagle? Nope. They COULD by 2 ASE's per month, but will they?

hamurobby's picture

DCRB you know FOFOA has a spike price waaaaay above 55k in that scenario. It may take 10 years, but I can wait. I know how hard it is to make a dollah.

MacGruber's picture

This is how China is quietly getting rid of its dollar reserves. Another nail in the dollar's reserve status casket.

BlueCollaredOne's picture

I'm surprised that they can see that gold is going to play a huge factor in determining currencies value in the future once fiat is dead, seeing as how you can blind them with dental floss.

Alpacanio's picture

China is lining up for a new world currancy backed buy gold. Guess who will have the strongest military by 2030?

BlueCollaredOne's picture

I like your spelling of "buy".

The financial humor is strong with this one

A Lunatic's picture

Which is why we are building 7 billion dollar apiece stealth destroyers to be deployed, along with with 60% of our Naval fleet, to the Asian Pacific by 2020. The destroyers themselves are scheduled to be operable in 2014, which should leave plenty of wiggle room for starting a bunch of shit we can't finish in Asia. Again.

LawsofPhysics's picture

LMFAO! The Chinese will have to become considerably more transparent before they get any reserve currency. Guess who will be getting paid in gold for their soybeans by 2030? The Chinese need to be careful what they wish for. Fucking bring it!

sunaJ's picture

PMs are worth the most when a metallic substance treats you better than a fiat exchange.  I wish it were different but this GlobeEx has been comatose for 48 months.  Unplug the life support, already.