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.

More:

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 - 16:38 | 2493421 Uchtdorf
Uchtdorf's picture

I rike yuah sens ob hyumah

Mon, 06/04/2012 - 20:31 | 2494180 Al Gorerhythm
Al Gorerhythm's picture

Raff out roud.

Mon, 06/04/2012 - 15:28 | 2493044 Soda Popinski
Soda Popinski's picture

Those barbarous chinese are making Ben rearry mad. 

Mon, 06/04/2012 - 15:33 | 2493085 kridkrid
kridkrid's picture

Last laugh will be on the chinese when they find out that their gold isn't backed by anything, whereas the dollar...

Mon, 06/04/2012 - 15:36 | 2493100 fourchan
fourchan's picture

...is backed by god. ugh!

Mon, 06/04/2012 - 15:40 | 2493115 NotApplicable
NotApplicable's picture

Well, actually Northrup Grumman, but you're pretty close.

Mon, 06/04/2012 - 22:46 | 2494630 IrritableBowels
IrritableBowels's picture

Bubbas

Mon, 06/04/2012 - 16:39 | 2493432 Matt
Matt's picture

What do those zany Chinese think this is, 1930s Vienna?

Mon, 06/04/2012 - 15:39 | 2493109 eclectic syncretist
eclectic syncretist's picture

They must not have translated Jack Hough's timely article in the Wall Street Journal today.

http://finance.yahoo.com/news/much-gold-investors-zero-suffice-040100747...

Or else they've done enough hacking to know how many banking puppets the journal employs. 

What's interesting in addition to this news is how much China has been ramping up internal gold production, about 15% a year for nearly a decade if my memory serves me correctly.  If they're buying it externally too they must be accumulating some stash.

 

Mon, 06/04/2012 - 16:27 | 2493360 Acet
Acet's picture

The really entertaining bit is how the Chinese have been able to get their hands on the barbarous relic at a discount thanks to the market suppression orchestrated by Benny and his friends in places like the Bank of England.

Mon, 06/04/2012 - 15:27 | 2493047 Dr. Engali
Dr. Engali's picture

Sooner or later this hoarding is going to allow gold to break free from the paper manipulation.

Mon, 06/04/2012 - 15:47 | 2493153 resurger
resurger's picture

Dr.

We i gave you a soap +1 , and i gave Blythe Masters, HSBC & Central planners +1,000,000 for keeping the barbarious relics affordable.

its like the sisqo song back in the days, "unleash the dragon"  PBOC hoarding in secrecy

 

Mon, 06/04/2012 - 17:35 | 2493623 hamurobby
hamurobby's picture

I cant take it anymore, Im getting an acme mortgage @ 3.8% for more. If I loose, I loose, Im used to it.

Mon, 06/04/2012 - 21:23 | 2494317 kekekekekekeke
kekekekekekeke's picture

she had dumps like a truck truck truck

thighs like what what what

Mon, 06/04/2012 - 21:23 | 2494318 kekekekekekeke
kekekekekekeke's picture

she had dumps like a truck truck truck

thighs like what what what

Mon, 06/04/2012 - 15:53 | 2493169 Pladizow
Pladizow's picture

If you stack, then the paper manipulators work for you, not against you!

Mon, 06/04/2012 - 16:29 | 2493364 knowshitsurelock
knowshitsurelock's picture

Would you care to elaboraate on this thesis?

By conjecture, with a derivatives bubble of 1 QUADRILLION, sucking up all available GDP on the planet, and the printing of fiat like a firehose trying to put it out, how can the metal overcome such a flood?

Mon, 06/04/2012 - 17:41 | 2493650 hamurobby
hamurobby's picture

Its a balancing act, and these guys are historically failures at it. Not to mention its compeditive devaluation.

 

Mon, 06/04/2012 - 18:58 | 2493919 Dr. Engali
Dr. Engali's picture

All the paper suppression in the world won't matter the first time somebody wants to take delivery and the golds not there.

Mon, 06/04/2012 - 19:20 | 2493969 LawsofPhysics
LawsofPhysics's picture

This has already been happening. I'd say shit get more real when other commodities like food and fuel are not delivered. All economies are local and becoming more local by minute. China has a lot of locals to deal with.

Mon, 06/04/2012 - 15:29 | 2493051 GeneMarchbanks
GeneMarchbanks's picture

Whoever is genuinely surprised by this should buy a kilo bar and smash themselves in the face with it cause they're teetering on stupid.

Mon, 06/04/2012 - 15:28 | 2493054 mt paul
mt paul's picture

they won't 

get my gold....

Mon, 06/04/2012 - 15:52 | 2493163 DoChenRollingBearing
DoChenRollingBearing's picture

Mine either.  

"Molon Labe."

Mon, 06/04/2012 - 20:24 | 2494160 BooMushroom
BooMushroom's picture

Mine either.
"Boating Accident"

Mon, 06/04/2012 - 15:28 | 2493055 resurger
resurger's picture

 

"in the first four months of 2012 Chinese purchases have increased by an unprecedented 782% over 2011."

 

!@#$!@#%!@#^%!@#$!@#$!@#^!#$^$%@#%^@#$!@#$!@^%!#$&$^*#@#!$!@#$!@#$

 

Shadow zombie markets wars soon

Mon, 06/04/2012 - 15:30 | 2493056 bigdumbnugly
bigdumbnugly's picture

but the real yardstick is how much has daffy duck been hoarding

http://www.youtube.com/watch?v=-fU6VLVbA2A

Mon, 06/04/2012 - 17:45 | 2493664 hamurobby
hamurobby's picture

Those stupid birds are always ahead of me...

Mon, 06/04/2012 - 22:22 | 2494576 tenpanhandle
tenpanhandle's picture

Me too!  Thought I'd give Daffy's routine a try though, but while rolling around and cavorting with my few coins, I lost one of them in my ass crack.  Finally found it but it is no longer in uncirculated condition.

Mon, 06/04/2012 - 23:46 | 2494759 logically possible
logically possible's picture

You didn't by chance find my cat?

Mon, 06/04/2012 - 15:29 | 2493058 Manthong
Manthong's picture

If I had a trillion or two of soon to be worthless foreign reserves, I know how I would hedge it.

Mon, 06/04/2012 - 15:41 | 2493117 NotApplicable
NotApplicable's picture

Hookers and blow?

Mon, 06/04/2012 - 17:47 | 2493674 hamurobby
hamurobby's picture

Truly and honestly, we all wish we were living with Charlies problems.

Mon, 06/04/2012 - 17:10 | 2493546 DosZap
DosZap's picture

In one of the latest Polls on what was the Best investment 28% of Americans said GOLD.

Wanna bet how many of that 28% owns any phyzzz?.

Mon, 06/04/2012 - 17:40 | 2493647 DoChenRollingBearing
DoChenRollingBearing's picture

+ a big fat one

I have seen two numbers, percentages of Americans who own non-jewelry gold: 1% and 3%.

We ain't seen nothin' yet...

Mon, 06/04/2012 - 17:16 | 2493562 Winston Churchill
Winston Churchill's picture

No wurry.

Dorrars reserves re-hypoed in London for Gold.

Mon, 06/04/2012 - 15:30 | 2493060 Kamehameha
Kamehameha's picture

His name was Orville. He was retired, but always planted 20 acres of sweet potatoes. He drove all over the neighborhood in an ancient old truck giving tons of them away and wouldn't accept pay or barter. One day I finally asked him why he did that. He told me that during the Depression all his relatives moved out of the city and in with him, if it hadn't been for the potatoes they'd have starved to death. I then said, "But Orville, but that was over fifty years ago. Why do you still grow them?" He said "yes, I know that, but the thing is, I don't ever want to forget how to do it."

Mon, 06/04/2012 - 15:47 | 2493151 Stuart
Stuart's picture

that was a great message.  

Mon, 06/04/2012 - 15:30 | 2493061 Uncle Remus
Uncle Remus's picture

So, I should click the "Buy" button on my favorite PM site?

Mon, 06/04/2012 - 15:32 | 2493074 Dr. Engali
Dr. Engali's picture

Click it a few times.

Mon, 06/04/2012 - 17:02 | 2493521 Overfed
Overfed's picture

And then maybe click it a few more times for good measure!

Mon, 06/04/2012 - 15:31 | 2493066 LawsofPhysics
LawsofPhysics's picture

China's intentions and priorities have always been very clear.  This is not unexpected.  Should I be requiring gold in exchange for the next shipment of soybeans.  I think so.

Mon, 06/04/2012 - 16:20 | 2493330 Zeilschip
Zeilschip's picture

Right, Americans demanding physical gold in return for American exports... How's that going to work out for the dollar?

Mon, 06/04/2012 - 19:25 | 2493987 LawsofPhysics
LawsofPhysics's picture

LMFAO! Will it matter when he dollar is fucking dead? How stupid are you? I'll take the gold or the new gold backed currency, either way. Careful what you wish for China.

Mon, 06/04/2012 - 16:23 | 2493348 flyingpigg
flyingpigg's picture

More likely they need to gold to barter Iranian oil. 

Mon, 06/04/2012 - 16:43 | 2493450 Infinite QE
Infinite QE's picture

China will have a partial gold backed currency by 2014. Bank on it. Perhaps a two tiered currency, one for domestic and one for global trade.

Mon, 06/04/2012 - 19:27 | 2493992 LawsofPhysics
LawsofPhysics's picture

Right, because the PBofC isn't printing-FAIL

Mon, 06/04/2012 - 15:31 | 2493070 Bay of Pigs
Bay of Pigs's picture

Charlie Munger can suck a bag of dicks.

 

Mon, 06/04/2012 - 15:44 | 2493137 dark pools of soros
dark pools of soros's picture

and a box of cocks

Mon, 06/04/2012 - 16:08 | 2493252 LongSoupLine
LongSoupLine's picture

...and a bushel of balls

Mon, 06/04/2012 - 15:35 | 2493075 Vincent Vega
Vincent Vega's picture

Brue horseshu ruv Ancot Streel.

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