On October 27 I was interviewed by German financial TV network DAF, about the Chinese gold market. After it was broadcasted on October 30, the host, Markus Bußler, told me it was the most viewed video on the DAF website that day. I hope the message is spreading. It was only 10 minutes so I couldn’t go in-depth, but was happy to share a few key points.
- Chinese consumer gold demand in 2013 was 2,200 tonnes, not 1,100 tonnes as the Wold Gold Council states.
- Only for consumer demand China net imported 1,500 tonnes in 2013.
- The best way to measure Chinese wholesale demand is by withdrawals from the Shanghai Gold Exchange vaults (SGE) – although this might change in the future.
- The PBOC does not purchase gold through the SGE.
- The PBOC is definitely increasing its official gold reserves.
- China is the most important player in the gold market, they are the second largest economy in the world and accumulate gold for it’s monetary value and in anticipation of a new monetary system.
- China still has a lot to work to do regarding the internationalization of the renminbi, developing their financial markets and diversify their FX reserves. In this sense China has no rush, it wants a gradual shift away from the US dollar.
- When China will fully utilize the gold it is accumulating, I expect the price to rise.
Make sure the captions are on for the first 30 seconds in which I’m introduced in German. From 0:30 the interview is in English.