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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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Mon, 06/04/2012 - 16:18 | 2493310 Temporalist
Temporalist's picture

DOH!(nuts) bitchez!

David Einhorn Explains Why Only Gold Is An Antidote To The Fed's Destructive "Jelly Donut Policy"

Mon, 06/04/2012 - 16:21 | 2493338 nodhannum
nodhannum's picture

Absolutely "barbarous" what the chinese are doing.

Mon, 06/04/2012 - 16:25 | 2493355 El
El's picture

I am beginning to believe the hype that the yuan will be the next reserve currency. China seems to be positioning herself well for a takeover. Once in position, China will dump the U.S. debt and that will be all she wrote.

Mon, 06/04/2012 - 16:52 | 2493494 Angus195
Angus195's picture



Mon, 06/04/2012 - 19:47 | 2494032 Apostate2
Apostate2's picture

Always good to have something of value to confiscate. It happened before may happen again.

Mon, 06/04/2012 - 22:47 | 2494633 prole
prole's picture

The only thing China is confiscating right now is Africa and Australia.

We are up next after Argentina.

Mon, 06/04/2012 - 16:43 | 2493448 knowshitsurelock
knowshitsurelock's picture

But wait, there are more dollars held by countries outside the United States, than there are in the US.  The Dollar is a global currency and it is huge and pegged to oil.

So, how is some shiny metal by a handful of rogue nations going to take over the entire global monetary system?  Didn't you see what happened to Lybia for thinking they could stand outside the central bankers slave system?  Even if some of these countries decide to trade oil for gold, you think the central bankers are just going to sit back and say, yea, go ahead?

Not gonna happen.  He who has the guns makes the rules.

Mon, 06/04/2012 - 16:46 | 2493467 Infinite QE
Infinite QE's picture

The problem is, all the components for American weapons systems come from.,.you guessed it, China. Anyone remember that missile fired from a silent drive sub off the coast of LA a while back?

Mon, 06/04/2012 - 17:56 | 2493719 Winston Churchill
Winston Churchill's picture

Or that drone that came down in Iran.

Can we all say "trapdoor' in Chinese.

Be so nice when they send our missiles back at us.

If we can even launch them.

Mon, 06/04/2012 - 16:54 | 2493500 Lednbrass
Lednbrass's picture

China is considerably more problematic than Libya, not much comparison there.  Libya doesnt own a huge chunk of the worlds factory production or have tens of millions of surplus young males they can use up in a conflict without skipping a beat.

Mon, 06/04/2012 - 17:45 | 2493667 DosZap
DosZap's picture


Not gonna happen.  He who has the guns makes the rules.

I disagree,you think the U.S. is going to attack China,Russia,India???...these dudes are not Libya, or Syria, of Iraq, or Iran..........

All three have multiples of ICBMs,(not to mention multitudes of troops,fighters, and decent navies)(exception India) and our military has just about been worn out and PSTD to death.

No way U.S. commits MADD, for that reason.............where there are NO winners.

Mon, 06/04/2012 - 16:50 | 2493483 knowshitsurelock
knowshitsurelock's picture

Yea, the'll just tell China.  Hey, I'm running a little late on my payment this month, and by the way, I don't really need that toaster I ordered either...

Mon, 06/04/2012 - 17:41 | 2493652 reTARD
reTARD's picture

Can we now have an episode of Hoarders dedicated to gold hoarding? LOL

Mon, 06/04/2012 - 17:51 | 2493695 orangegeek
orangegeek's picture

History tells us that the communists always outsmart the capitalists.


Even Venezuala's market is way up this year - outperforming the rest of the world.


Go China go - keep buying.

Mon, 06/04/2012 - 18:36 | 2493857 pcrs
pcrs's picture

for every buyer there is a seller

Mon, 06/04/2012 - 18:40 | 2493862 prodigious_idea
prodigious_idea's picture

They bought $6 billion worth of gold?  Seems inconsistent with news of Chinese economic climate.

103.6 x 2,240 lbs x 16 oz x $1,620/oz = $6B

Mon, 06/04/2012 - 21:46 | 2494441 Red Sole Shoes
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Mon, 06/04/2012 - 21:59 | 2494489 batz
batz's picture




Predicted two weeks ago here:


There are lots of times they could have announced this, but for whatever reason, they let it out now - a few weeks before June 20th.

Mon, 06/04/2012 - 22:00 | 2494506 Red Sole Shoes
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Mon, 06/04/2012 - 22:08 | 2494530 Alpha Monkey
Alpha Monkey's picture

The website of the Pan Asia Gold Exchange has two vidoes at the bottom of the homepage.  The one in chinese, subtitled in english, explains china is unsatisified with the level of price setting rights they have, relative to the size of their economy.  It alludes to a national strategy that has been developed to give china more power in the world financial markets.  They want to attain more price setting rights, not only on commodities, but gold as well.

I also thought it was interesting, they showed barrels of oil, then showed them in yellow, like transacting gold for oil.

Mon, 06/04/2012 - 22:13 | 2494556 Red Sole Shoes
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Tue, 06/05/2012 - 00:22 | 2494802 Bokkenrijder
Bokkenrijder's picture

And now the obvious question: China is a totalitairian state which has been fudging it's 'growth' numbers for years, so WHY on earth would they release these numbers, even if they are true?

The fact that the Chinese are releasing this (fudged?) data should be considered as extremely suspicious.

As to what gold the Chinese are buying in Hong Kong: I don't know. I frequently visit Hong Kong and always look for a good opportunity to add some physical gold to my personal hoard, but all the gold they sell in stores like Chow Tai Fook (really!) is of Chinese origin which I don't trust. Nuggets, Krugerrands and Mapple leaves are hard to find in Hong Kong. Same goes for silver, only local stuff, nothing from Australia or Canada.

Tue, 06/05/2012 - 01:56 | 2494949 Youri Carma
Youri Carma's picture

“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, yeah!!!.”

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