LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Monetary Metals Don’t Need a "Gold Standard" Proxy System
By: Stefan Gleason, Money Metals Exchange

Precious Metals Update Video: Gold is in a pause, momentum on the downside
By: Ira Epstein

Currency & Gold (video) Update
By: Gary Savage

We Caught The Bitcoin Bottom And Then The Top - Now What?
By: Avi Gilburt

Facebook's Version of 'How to Serve Man'
By: Rick Ackerman, Rick's Picks

Could A Deutsche Bank Collapse Crash The Markets?
By: Dave Kranzler

Here’s What the Market Did EVERY TIME the Fed Cut Rates During an Economic Expansion
By: Frank Holmes, US Funds

How to Fix GDP
By: Keith Weiner, Monetary Metals

Northern Vertex Reports Best Quarter to Date, Production Results for June and Heap Leach Test Study Conducted at Moss Gold Mine, Arizona
By: Northern Vertex Mining Corp.

Federal Debt Ceiling Reached as Federal Spending Rages
By: Clint Siegner

 
Search

GoldSeek Web

 
BOOM: SGE Withdrawals Week 3, 2015: 71 tonnes!


 -- Published: Friday, 30 January 2015 | Print  | Disqus 

By Koos Jansen

As I wrote last time on data from the Shanghai Gold Exchange (SGE), in week 2 of 2015 withdrawals from the vaults of the SGE (that equal Chinese wholesale demand) came in extremely high at 70 tonnes; the third highest amount ever. In week 3 (January 19 – 23), though, the Chinese withdrew even more at 71 tonnes, up 0.89 % w/w, and a new third highest amount ever. Year to date 202 tonnes have been withdrawn fro the SGE vaults, up 15 % y/y. Like last week, this was happening while the price of gold was rising sharply, staggering numbers.

Screen Shot 2015-01-30 at 3.01.34 PM

Screen Shot 2015-01-30 at 2.56.15 PM
Blue (本周交割量) is weekly gold withdrawn from the vaults in Kg, green (累计交割量) is the total YTD.

Corrected by the volume traded on the Shanghai International Gold Exchange (SGEI), withdrawals in week 3 were at least 65 tonnes (read this post for a comprehensive explanation of the relationship between SGEI trading volume and withdrawals). Year to date withdrawals corrected by SGEI volume were at least 189 tonnes.

Shanghai Gold Exchange SGE withdrawals delivery 2015 week 3, dips

Shanghai Gold Exchange SGE withdrawals delivery only 2014 - 2015 week 3, dips

Furthermore, the end of day premium of the SGE main physical gold contract, Au9999, has been positive throughout all of week 3. This means scrap supply was not abundant over this period – a discount, or negative premium, can’t be arbitraged by foreigners as bullion export from China is prohibited. Estimating scrap/recycled gold that supplied the SGE at 4 tonnes and mine production at 9 tonnes, sets imported gold for week 3 somewhere in between 52 and 58 tonnes.

It’s still a mystery why mainstream media are not tracking weekly SGE withdrawals. I’ve read all over the news that Russia’s central bank has added 152 tonnes of gold in total to its reserves in 2014. In perspective, this is approximately the same amount of gold China has imported in the first three weeks of 2015. In my post China Continues To Drain Global Gold Inventory I have, once again, pointed out that import numbers derived from SGE withdrawals are for 95 % covered by export from the UK, Switzerland, Hong Kong and the US. These countries disclose only non-monetary gold trade, which support my assumption PBOC purchases are an invisible side show from public gold trade numbers and SGE withdrawals.

Chinese domestic mining has been roughly 27 tonnes over the first three weeks of 2015, which is not exported. All this gold (import and mine) is being sold through the SGE. Until I run into evidence that states the contrary, the PBOC does not buy any gold through the SGE, but most likely through proxies in Hong Kong or London. So, PBOC purchases have to be added to the tonnage sold through the SGE. According to Deutsche Bank the PBOC has purchased roughly 500 tonnes a year since 2010. Go figure.

Thomson Reuters GFMS released the GFMS Gold Survey 2014 – Update 2 on Thursday. The report states Chinese consumer gold demand in 2014 was 866 tonnes.

Screen Shot 2015-01-30 at 4.45.09 PM

My regular readers will not be surprised I dispute this number; in 2014 China imported at least 1,200 tonnes, mined 451 tonnes and according to GFMS’ numbers scrap accounted for 182 tonnes. So supply was at least 1,833 tonnes, yet consumer demand was 866 tonnes. Quite a gap, 967 tonnes. 

Screen Shot 2015-01-30 at 5.12.24 PM

This gap was at least 737 tonnes in 2013. In the table above taken from the Gold Yearbook 2013 published by the China Gold Association (CGA), we can see import was 1,507 tonnes (blue) and Chinese domestic and overseas mining accounted for 445 tonnes (purple), if we add GFMS’ scrap supply number for 2013, which is 144 tonnes, total supply in 2013 was 2,096. The gap between 2,096 and 1,359 tonnes is 737 tonnes. Neglecting scrap supply disclosed by the CGA (green).

In the report GFMS states “demand does not include transfers of physical gold between financial organizations or gold used to support the OTC market”.

In forthcoming posts I will expand on the differences in metrics used all across the globe (by the WGC, GFMS, CGA, CPM, me) to get a better understanding why Chinese demand numbers are so divergent.

In any case the 0.6 metric tonnes of gold sold in one day in just one shopping mall in Beijing in January, 2015, was not gold used in transfers between financial organizations…

Chinese new year gold goat 2015 1
Beijing January 3, 2015

Koos Jansen
E-mail Koos Jansen on: koos.jansen@bullionstar.com


| Digg This Article
 -- Published: Friday, 30 January 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.