Has China Awoken The Gold Bull?

Written By: James West  August 21, 2015 And is it time to buy gold miners? Investor interest in gold (XAUUSD:CUR) has been at an all time low recently, with many acknowledged ‘gold bugs’ having thrown in the towel as gold prices flirt with multi-year lows, and sentiment projected by mainstream financial media would have you thinking gold as an asset is finished. This despite the growing comprehension by John Q Public that all of our markets are horribly manipulated. The disingenuous red herring of prosecuting members of the London Gold Fix group was designed to convey they perception that the industry is properly and diligently regulated. Such is not the case. But reconciling CFTC Commitment of Traders reports against trading patterns is an exercise in futility, since the reporting does not disclose which market participants are in which category. So analysts are left to deduce positions. Concentrated positions are thus difficult to discern. … Continue reading

Gold and Silver Manipulation in the Eyes of the Chinese

By Andrew Hoffman
Gold Seek / Miles Franklin Blog

chincoin160What a tragic mess the global economy has become with no hope of any outcome other than systemic currency collapse. Each day, our “contrarian” view that sovereign Treasury yields will plunge toward a Japan-like zero is validated further, per what we wrote in May’s “Most Damning Proof Yet of QE Failure.” In other words, irrespective of inexorably rising inflation, particularly in “emerging markets” most vulnerable to Western printing presses, global “big money” will bid Western sovereign bonds to record levels, anticipating the inevitable “QE to Infinity” that accompanies the terminal stage of all fiat Ponzi Schemes. That is, until hyperinflation destroys the real value of essentially all financial assets.

To wit, this morning’s surge in German bonds to record highs; just after an abysmal industrial production report, and before the ECB left its “NIRP” policy unchanged, but kept the “QE door” wide open – when Draghi highlighted “downside risks” to his economic outlook; including, of course, the ambiguous scapegoats of “emerging market woes” and “geopolitical risks.” You mean like the EU threatening Russia, where nearly a third of its natural gas emanates with sanctions?

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Chinese Gold Demand Is Twice As Big As World Gold Council Tells You

sge550

By Willem Middelkoop
Commodity Discovery Fund / Seeking Alpha

Even in a time of rapid global news dissemination provided by hundreds of thousands of journalists working around the clock, an observant Dutch blogger can still get a global scoop. How significant a scoop? The true size of China’s massive total gold demand!

Just four years ago, Koos Jansen became intrigued by the relationship between gold and money, after reading my Dutch book “Overleef de kredietcrisis.” In May 2013, he responded to my tweets about the exploding Asian gold demand, after the dramatic fall in the gold price a month earlier. We were surprised to learn that at the time, no reliable statistics of the total Chinese gold demand were available in the English language.

It did appear, however, that the Shanghai Gold Exchange (SGE), the Chinese counterpart of the COMEX, played a crucial role in the Chinese gold trade. Only the goldminerpulse.com website kept track of the ever increasing physical gold deliveries at the SGE, as it monitored the trade on the gold futures index. The site published the following chart, which showed that the total physical delivery had become almost as large as the total world mine production. I used the chart for our annual shareholder meeting, in April 2013.

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China May Be Importing Much More Gold Than Is Being Reported

By Dave Kranzler
Investment Research Dynamics / Seeking Alpha

chinfrogIt’s being widely reported that China’s gold imports so far this year are down from its record level of imports in 2013, with lower imports being attributed to this year’s decline in the yuan vs. the dollar. However, I will present several reasons why generally published and accepted western reports of China’s gold import activity are unreliable and that China’s true level of gold demand is significantly higher than is commonly accepted or known outside of China. Because of this “shadow” physical demand in China, I believe that the expected seasonal July/early August sell-off in the price of gold will not only be muted but there might be an unexpected move higher.

In February this year, the World Gold Council published its annual global gold demand report. It reported that China had imported 1,066 tonnes in 2013: World Gold Council Global Gold Demand (see pg. 4). However, the World Gold Council data only picks up the data for gold entering China via Hong Kong and this only captures a portion of China’s total demand for gold. In fact, China’s total demand for gold in 2013 was 2,197 tonnes. This number is derived from the total amount of gold withdrawn from the Shanghai Gold Exchange in 2013.

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China And Its Role In The Gold Market

Gold Broker

We cannot understand today’s gold market without understanding the role China and, in a different way, India play in it. The gold market in general is very opaque and the Chinese one, in particular, is even more.

In this article, I will look at China’s role in the gold market. In 1950, communist China prohibited private ownership of bullion and put the gold industry under state control. Fifty years later the People’s Bank of China abandoned its monopoly on the purchase, allocation and pricing of gold. In 2004, for the first time since 1950, private persons were permitted to own and trade gold.

China has become the most important physical gold market in the world. It is now both the number one producer and consumer of gold. The World Gold Council, in a recent report on China and gold, expects the Chinese private sector gold demand to be at least 1,350 tonnes by 2017. Today China is the world’s largest market for gold bars, in part because of successful development initiatives by the major chinese banks.

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Chinese gold demand to rise 20% by 2017

By Daniela Cambone
Kitco News

Albert Cheng

Albert Cheng

When China became the world’s largest gold market in 2013, the question that ultimately followed was, can this growth be sustained, said Albert Cheng, Managing Director of the World Gold Council.

The WGC released its latest report focused on China’s appetite for gold on Tuesday with the intent of addressing the sustainability of the market. The report found that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes per year to at least 1,350t by 2017 — a growth of 20% over the next four years.

The global market should look to China as one of the engines of the global gold market, the other being India in that equation, said Cheng in an exclusive interview with Kitco News at the WGC’s headquarters in New York.

China officially became the top gold-consuming nation in 2013, as India, the previous title holder, severely restricted gold imports in an attempt to narrow is massive current account deficit.

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Where is China’s missing gold?

By Shu-Ching Jean Chen
Forbes

China has recently become the world’s largest consumer of gold. Uniquely, it also ranks as both the largest producer and the biggest importer of gold. Yet a big question surrounds the true state of the Chinese demand for gold; the answer would determine how global gold prices are likely to fare. The expectation that Chinese investors will sustain a voracious appetite for gold has helped to spark a recent rebound in gold prices.

Yet speculation abounds about a large trove of gold that seems to be missing from the global market. Analysts calculate that up to 500 tons or more are stashed away, based on the difference between China’s domestic gold production of 428 tons in 2013 plus its estimated gold imports of at least 1,158 tons, and its annual demand of about 1,066 tons. The Chinese government does not release an import figure, so this number is disputed.

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China’s government likely hoarding gold

By Cecilia Jamasmie
MINING.com

chinfrogChina’s government is likely the one behind the significant increase in gold imports that has made the country become the world’s second-largest consumer of the precious metal after India, reports Financial Times.

Demand for the yellow metal in China has experimented a solid growth over the past four years to the point analysts predict the nation’s gold demand will beat supply by 2015, making it the world’s largest buyer by year-end.

China is already the world’s biggest gold producer and it has been so since 2007, with an annul output of 403 tons in 2012, a year-on-year growth of almost 12%.

The question is, says Evy Hambro — chief investment officer of BlackRock’s natural resources equity team, where all that gold is going.

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Gold gets bullish lift from China

By Stephen Leeb
Forbes

Gold may be slumbering, but when it awakens, watch out.

I remain confident on gold’s future prospects thanks largely to China, the world’s No. 1 gold buyer. In October China bought a near-record 130 tons. In the first ten months of 2013 China bought more than 950 tons, making a 1,150 ton tally likely this year, far above past gold-buying records for any country, including gold-crazy India.

Remember, that covers only readily trackable gold passing through Hong Kong. China almost certainly imports still more through other conduits.

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Uncovering China’s rush for gold

By Jan Skoyles
Resource Investor

Jan Skoyles

Jan Skoyles

The Chinese government acknowledged gold as a strategic asset in 2000, when it included the establishment of an open gold market in its five year economic plan.

Since then China has come to play a significant role in the international gold market as it strives to develop and advance all aspects of the industry and gold’s role in the domestic market.

Why it has decided to focus on building and developing the gold industry from both a supply and demand perspective is a question that requires further investigation.

In the coming weeks Koos Jansen and myself will reveal the cogs of China’s gold market as we work to reach a conclusion as to why gold is such a high priority for China’s economic development.

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