Update June 5, 2014: This post was about the Chinese real estate market, one of the sources I used was a website from Taiwan called Want China Times, it stated:
In Ordos, one of the 12 subdivisions of Inner Mongolia, people in the ghost city are bartering to settle their debts.
…At first, the most common debt settler was Chinese liquor or baijiu, a favorite of native Inner Mongolian residents. However, the lack of price transparency with the liquor prompted local law enforcement departments to ban settlement with the product.
…He Jun turned to precious metals because of the ban. “I believe gold and silver, which have high market liquidity, are suitable for settling debts,” he noted, adding that “gold can be exchanged for cars and silver for houses.”
…For example, He uses silver objects worth of 500,000 yuan (US$80,000) to pay off at least 1 million yuan (US$160,000) in debt.
After a thorough comment on this post about this specific source, read below, and a little research by myself I found this source unreliable. I decided to delete most of this post because it didn’t make sense anymore. I will never use the website Want China Times as a source again.
From here on the original post continues:
Meanwhile, according to the last SGE weekly report, the silver premium over international price hit 5.7 % on May 9. On the Shanghai Futures Exchange, on May 16, nearly all silver contracts were still trading in backwardation (except for the April 2015 contract).
Overview Shanghai Gold Exchange data 2014 week 19
- 28 metric tonnes withdrawn in week 18 (5-5-2014/9-5-2014)
- w/w + 17.79 %
- 721 metric tonnes withdrawn year to date.
My research indicates that SGE withdrawals equal Chinese wholesale gold demand. For more information read this.
This is a screen shot from the weekly Chinese SGE trade report; the second number from the left (blue – 本周交割量) is weekly gold withdrawn from the vaults in Kg, the second number from the right (green – 累计交割量) is the total YTD.
This chart shows SGE gold premiums based on data from the SGE weekly reports (it’s the difference between the SGE gold price in yuan and the international gold price in yuan).
Below is a screen shot of the premium section of the SGE weekly report; the first column is the date, the third is the international gold price in yuan, the fourth is the SGE price in yuan, and the last is the difference.