Koos Jansen
BullionStar Blogs
Koos Jansen
Posted on 20 Aug 2013 by

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,

Koos Jansen
E-mail Koos Jansen on:

  • wheresthefreemarket

    For Prime Minister Cameron Re. LBMA Gold Trading

    Because gold is an asset unto itself (it is nobody’s liability) and because
    gold lies at the heart of the financial system, the disappearance of gold liquidity
    or gold flows due to continued price control will signal financial system crisis
    causing a subsequent rush to secure other real assets, disruption of both the
    global bond markets and of currency functionality.

    Mr. Cameron, you must act quickly to reform the LBMA. Consequences of not
    acting are world financial system turmoil.

    Individuals worldwide are watching and noting the activities in the UK gold
    markets and their consequences to the world’s financial system.

    Physical gold is, as we speak, being rapidly withdrawn from the financial
    system and, because there is limited gold available, you have only a limited
    time to act to disallow levered gold instruments and ensure only real trading
    of gold on the LBMA so that gold flows are maintained in the financial system.

    In 2014, physical gold exchanges are, in addition to the already extant Shanghai
    Gold Exchange, scheduled to start trading in Moscow, Dubai, Singapore, Thailand
    and South Korea. These markets will provide a further source of demand for
    Western gold given continued containment of gold’s price and this essential
    financial asset will be further stripped from the West’s financial markets
    and disappear into the East depriving the West of this critical stabilizing
    asset from our financial system.

    http://www.safehaven.com/article/32394/for-prime-minister-cameron-re-lbma-gold-trading

Copyright Information: BullionStar permits you to copy and publicize blog posts or quotes and charts from blog posts provided that a link to the blog post's URL or to https://www.bullionstar.com is included in your introduction of the blog post together with the name BullionStar. The link must be target="_blank" without rel="nofollow". All other rights are reserved. BullionStar reserves the right to withdraw the permission to copy content for any or all websites at any time.