Koos Jansen
BullionStar Blogs
Koos Jansen
Posted on 14 Mar 2015 by

SGE Withdrawals 45t Week 9, YTD 456t

Chinese wholesale gold demand, that equals withdrawals from the vaults of the Shanghai Gold Exchange (SGE), accounted for 45 metric tonnes in week 9 of 2015 (March 2 – 6). Year to date 456 tonnes have been withdrawn from the SGE vaults. An estimate suggests 340 tonnes has been net imported into the Chinese domestic gold market over this period (calculating with a yearly SGE scrap rate of 250 tonnes).

Screen Shot 2015-03-14 at 8.47.03 PM
Blue (本周交割量) is weekly gold withdrawn from the vaults in Kg, green (累计交割量) is the total YTD.

Since the inception of the Shanghai International Gold Exchange (SGEI) there was a possibility the significance of SGE withdrawals, as published in the Chinese weekly reports, became distorted by activity on the SGEI – in the Free Trade Zone. That’s why I corrected SGE withdrawals by trading volume from the SGEI, just to be on the safe side of measuring Chinese wholesale demand.

However, we just learned that what was traded and withdrawn on the SGEI in 2014 was primarily imported into the Chinese domestic gold market. So, for the time being we can assume SGE withdrawals are still an accurate proxy for Chinese wholesale demand – a metric described in this post.

Shanghai Gold Exchange SGE withdrawals delivery 2015 week 9 dips

Shanghai Gold Exchange SGE withdrawals delivery only 2014 - 2015 week 9

I like to note SGEI trading volume has jumped recently, reaching a record in week 9 at 34 tonnes (counted unilaterally). Perhaps this is exchange is slowly coming to life.

Shanghai International Gold Exchange SGEI weekly gold trade volume

Only the 1kg physical contract iAu99.99 is traded on the International Board (SGEI), there seems to be nil interest in the 100 gram physical contract iAu100 and in the 12.5kg (London Good Delivery bars) contract iAu995.

Overall SGE volume is somewhat dropping as the spot deferred contracts Au(T+N1) and Au(T+N2) are falling back after a resurrection that started late November 2014.

SGE weekly gold volumes

On the Shanghai Futures Exchange (SHFE) we can see the same trend; slightly dropping volumes. Nothing “worth mentioning”.

COMEX vs SHFE gold volume and open interest

Koos Jansen
E-mail Koos Jansen on:

  • Doolie

    If that is so then China will exceed purchasing the annual global mined production on its own.

    To every buyer there is a seller, or so I believe ? ? ?

    The conundrum to solve in all these explanation is Who is selling to them ? It isn’t Comex ! Which leaves only Central Banks as a possible answer, but who ?

    • DameEdnasPossum

      Irrespective of where it comes from…the question is, for how long can this volume of gold continue to be sold to/ purchased by China, Russia, India et al.? Noting also that this West to East transfer has occurred for more than the past decade now.

      Gold is scarce; it’s neither paper nor zeros on a screen after all, there is a limit to its supply.

      And what happens when that limit is reached?

    • otoman

      Why you would assume that the Comex is not selling gold (indirectly speaking) to China is beyond me.


      It may not be a direct sale, but most transactions are processed through England and Switzerland, where they are melted in China preferred kilo size bars, then goes on it’s way to the east. Many central banks have been net buyers for at least a year. Hell will freeze over before I believe the feds have any gold to speak of in Ft. Knox, or anywhere else in the U.S. It is my humble belief that the feds put the countries gold into the hands of big banks a long time ago, as security, which in turn the banks have been selling it to the east at these ridiculously low prices in order to appease the east of the coming dollar crash. China has been dumping dollars by buying gold with them.

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.