BullionStar News
Writers Torgny Persson, Koos Jansen
& Hong Kang See

Chinese Gold Financing Deals Explained

Thursday the 5th of March 2015
One of the main causes many gold analysts assume Chinese gold demand (and withdrawals from the vaults of the Shanghai Gold Exchange) is inflated is because of Chinese Commodity Financing Deals (CCFD). However, this analysis is incorrect.

When I had discussion the other day with a colleague about how round tripping gold flows in China were completely separated from the Chinese domestic gold market and the SGE, I send him a link to a post I had written on round tripping that explains everything. When I clicked the link myself and read my post (from May 2014) I was of the opinion my writing skills have improved since I wrote it. Time to write a thorough new post on round tripping and other Chinese gold financing deals! Most likely I will rewrite more posts on the mechanics of the Chinese gold market.

Round Tripping

Most CCFD are ways for Chinese speculators to acquire cheap funds using commodities as collateral. When it comes to using gold as collateral for CCFD there are two options, round tripping and gold leasing. What is round tripping? Goldman Sachs wrote a report in which the process was properly explained. For this post we will not examine other commodities than gold. From GS:
While commodity financing deals are very complicated, the general idea is that arbitrageurs borrow short-term FX loans from... Continue Reading
By: Koos Jansen
BullionStar's Retail Bullion Shop, Showroom & Vault
Shop Address:
45 New Bridge Road
Singapore 059398

Opening Hours:
Mon - Thu: 11am - 7pm
Fri: 11am - 5pm
Sat: 10am - 2pm
Click here for more info
Featured Products
BullionStar Mint - Gold Bars with No Spread - 100 g BullionStar Mint - Gold Bars with No Spread - 100 g USD 3,913.63
BullionStar's own gold bar - No spread between the buy & sell price BUY NOW
Canadian Silver Maple 2014 - 1 oz Canadian Silver Maple 2014 - 1 oz USD 18.42
Produced by Royal Canadian Mint - The most popular silver bullion product in Singapore BUY NOW
Canadian Gold Maple 2015 - 1 oz Canadian Gold Maple 2015 - 1 oz USD 1,215.31
Canadian Gold Maple Leaf coins are considered some of the most beautiful Gold coins in the world. These Gold bullion coins appeal to investors and collectors worldwide for their beauty and purity. BUY NOW
Heraeus Silver Bar - 10 oz USD 172.68 BUY NOW
PAMP Gold Bar - 100 g USD 3,828.49 BUY NOW
Australian Gold Lunar Series 2015 - Year of the Goat - 1 oz USD 1,270.89 BUY NOW
Australian Silver Lunar Series 2015 - 1 kg USD 592.47 BUY NOW
Pick-up, Store or Ship

It´s your metals - It's your choice. Pick-up your metals in our shop, store them in our vault or ship them to your delivery address.

Learn More
My Vault Storage®

"My Vault Storage®" is BullionStar’s solution for storage. Store your bullion fully allocated in one of the most stable and safe jurisdictions in the world – Singapore.

Learn More
How to Order from BullionStar

This guide provides you with information of how you place an order with BullionStar.

Learn More
Insurance & Protection

You can always feel safe whether you have your products shipped or stored with BullionStar. All products are fully insured in all instances.

Learn More
Ask a BullionStar Expert

Let our experts guide you in the world of precious metals.

Learn More
FAQ & Help

Answers to your most frequent questions.

Learn More
Gold Silver Platinum Palladium
Gold Spot:
USD 1,167.80 -0.75%
Silver Spot:
USD 15.92 0.00%
Platinum Spot:
USD 1,158.50 -0.26%
Palladium Spot:
USD 816.50 -0.37%
Gold USD 1,167.80 -0.75%
Silver USD 15.92 0.00%
Platinum USD 1,158.50 -0.26%
Palladium USD 816.50 -0.37%
BullionStar Newsletter
Sign up for BullionStar's FREE newsletter to get precious metals news and commentary

Gold is the most stable asset class known to man. Gold sustains value in times of economic uncertainty.

Gold has historically also been used as money. With investment demand increasing significantly, the time frame for buying gold at today’s prices may be running out. Read more here.
Silver is an asset with enormous potential. The industrial demand for silver is increasing quickly.

Silver has historically also been used as money. With both industrial demand and investment demand increasing, silver may be the investment of a lifetime. Read more here.