Koos Jansen
BullionStar Blogs
Koos Jansen
Posted on 22 Feb 2014 by

Weekly Chinese Gold Demand Transcends Global Mining Production, Again

All over the media we have seen extreme gold shopping sprees around new year and at the Lunar year in China. This resulted in an all time Chinese gold demand record in January – which accounted for 246 tons. In the screen shot below the second number from the right (green – 本年累计交割量) is the amount of gold withdrawn form the SGE vaults in January in Kg.

SGE withdrawals january 2014

Chinese aunties buyng gold for sale in Taiyuan

Below a video from Chinese state TV network CCTV on the gold buying spree around the Lunar Year. Although I didn’t manage to produce subtitles (working on it!), I think the images speak for themselves.

Who thought this gold rush would come down anytime soon is wrong. It seems the Chinese are in a state to buy all the physical gold that can be supplied. The beauty of internet is that I have a lot of sources in the mainland, and Chinese that live in other parts of the world, that sent me regular updates on what’s happening in Chinese jewelry stores, in the paper gold market, on the SGE and in the Chinese media if they happen to stumble on something newsworthy. Yi Zhang lives in San Fransisco and sent me an email on February 15, 2014:

 

Hi Koos, these two photos were taken yesterday by my uncle in a gold shop in Beijing. “People are buying gold like groceries” – he told me in Chinese. 

Regards,

Yi

Beijing jewelry store 14-02-2014 Yi Zhang
Beijing jewelry store 14-02-2014
Beijing jewelry store 14-02-2014
Beijing jewelry store 14-02-2014

I the first have of February the Chinese have been very aggressive buyers. Can it be these people are fully aware of the dangers of credit bubbles and gold’s function as a store of value and a protection against potential implosions?

Overview Shanghai Gold Exchange data 2014 week 7

– 64 metric tons withdrawn in week 7   (10-02-2014/14-02-2014)

– w/w  + 60.26 %

– 320 metric tons withdrawn year to date

My research indicates that SGE withdrawals equal total Chinese gold demand. For more information read thisthisthis and this.

SGE withdrawals 2014 week 7

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a screen shot from the weekly Chinese SGE trade report; the second number from the left (blue – 本周交割量) is weekly gold withdrawn from the vaults in Kg, the second number from the right (green – 累计交割量) is the total YTD.

SGE withdrawals delivery week 7 2014

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).

SGE premiums

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.


SGE premiums

In Gold We Trust

Koos Jansen
E-mail Koos Jansen on:

  • helen

    I found this article at Global Research. Could you comment on its authenticity?

    China Expands Gold Reserves, Surged Past Italy and France in Ranking
    By Global Research News
    Global Research, January 19, 2014

    Claiming to have vaulted France and Italy in terms of gold reserves, China has announced that they have expanded their gold reserves by 76 %, thus becoming 3rd largest gold reserves in the world. According to the voluntary reporting system of IMF which monitors international gold reserves, China’s gold reserve have increased from the last reported holdings of 1,054 Tons in 2009, April to 2,710 metric tons currently.

    China claims to have surged past Italy which has current holdings of 2,451.8 tons of gold reserves followed by France having 2,435.4 tons. The accurate reports released by the World Gold Council Data has placed US at the first position of world ranking for holding largest gold reserves which is 8,133.5 tons. The percentage of foreign reserve in gold in US is 75.1 %. Germany holds the second position with 3,391.3 tons of gold reserves.

    In order to acquire the position, the Central Bank of China had added 622 tons of gold last year which was a massive boosting from the 380 tons of 2012 estimate. China had surged several nations to become the largest producer of gold. It has boosted its gold reserve without purchasing gold from global bullion market. While most of the major gold producing nations are reporting the decline of production, China remains to increase the production

  • Hugh

    Another great article Koos. Keep up the good work.

  • Bill

    Global Research is an arm of HSBC, but do not know if they put out the news on China’s reserves.
    Me thinks other sources would be reporting it.

  • http://google.com/+TiongHumSoh Tiong Hum Soh

    “Can it be these people are fully aware of the dangers of credit bubbles and gold’s function as a store of value and a protection against potential implosions?” I don’t think these Chinese consumers have credit bubbles in mind; what we are seeing here is ‘wealth effect’ at work.

    • http://www.ingoldwetrust.ch Koos Jansen

      Thanks for your comment out of Asia! It can be a wealth effect. Wealth the Chinese are regaining since decades and which they are accustomed to store in gold for centuries.

    • Hugh

      And anyone worldwide with an ounce of common sense is doing the same.

  • Ceri shepherd

    Koos would it be possible to also show the increase for this year YTD in relation to the YTD last year. For example in this report we are on 320 tons what were we on in the same period last year? And what percentage are we up or down on the same period last year. By the way great work Koos

  • bernard

    Dear Buyer,
    I am Mr:Bernard a Gold Consultant given a mandate to source for the reliable Gold buyer’s on-behalf of a reputable gold company here in Ghana
    The company has available for sales as follows:
    1). PRODUCTS:- Gold Bars & A.U. Gold Dust in raw form.
    2). QUALITY:- Not less than 22+/ 23 Carat with a minimum purity of 99+% or Better.
    3). QUANTITY:- 150 Kilos (Bars & Dust).
    4). PRICE:- 10% Discount of London market exchange (LME) of the buying day on world market price,(Negotiable).
    5). METHOD OF TESTING /ASSAYING:- Sampling and testing will be made at the premises of the precious minerals marketing company (PMMC) in Ghana, after which the gold will be sealed in the presence of buyer and seller for export through PMMC.
    6). SHIPMENT:- Shipment will be made through precious minerals marketing company (PMMC) of Ghana (FOB) to buyer’s refinery choice of destination.
    7). PACKAGING:- In metal boxes.
    8). Due to the sensitive nature of gold transaction world-wild, every interested buyer or buyer’s representative will be required to come down to Ghana to see things in their right perspective by meeting with the gold owners.

    Looking ahead of your purchase interest.

    Regards,
    Mr Bernard.
    dealer_gold@yahoo.com

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