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Koos Jansen

Koos Jansen

Koos Jansen is a precious metal analyst from the Netherlands. Koos
mainly provides unique insights about Chinese gold market.

Does The UK Supply The Shanghai Gold Exchange?

A quick calculation on where SGE deliveries might come from. If we take the delivery numbers from January to June of the Shanghai Gold Exchange, we see that 1098t left the vaults in those six months. Where does this gold come from?

 

The SGE states that all Chinese domestic gold mining companies and all Chinese banks that are licensed to import gold are required to sell their metal through the SGE. Another SGE rule is that once the gold has left their vaults it’s not allowed to come back in, as we could read on the website of the  ICBC (and the SGE confirmed this to me on the phone).

 

So we can roughly say that imports plus mining should equal SGE deliveries. Chinese mining YTD is 200t, net imports from Hong Kong YTD are 494t. that makes 694t. So we’re still “missing” (1098 – 694) 404t.

 

 

 

Year to date the UK exported 797t (which partially could come from the 380t GLD lost in those months) of gold to Switzerland. The Swiss net exported 374t to Hong Kong, so that leaves another 423t for the Swiss to store or export to other countries.

 

 

Can it be the Swiss exported a part of the 423t to Shanghai directly, where there was demand for 404t?

It didn’t come from the US (where total COMEX inventory change was -106t YTD), because their export to China (100t) mainly went to Honk Kong, and those numbers are already taken into account in the Chinese net imports from Hong Kong.

 

Of course the “missing” 404t of SGE deliveries can come from everywhere but Switzerland seems very plausible. I will have one more try next week to get some data from Swiss customs to find out more on their gold exports.

Just my thoughts,

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