China Goes Gold Crazy

[pmbug]

...
Mainland Chinese purchasers have been ferocious. First, they emptied stores in their own country. Caibai, Beijing’s largest gold merchant, had a queue 30 feet out the door on the morning of the 19th. “So many people in line,” remarked a customer in Nanjing, where one person splashed out 2.9 million yuan on ten gold bars each weighing a kilogram. Retailers ran out of stock in Guangzhou. The China Gold Association reported that on the 15th and 16th retail sales of gold tripled across China. Daily sales soared to five times the usual level at one retail chain.

Volume on the Shanghai Gold Exchange, considered a proxy for the metal’s demand in China, surged, setting consecutive records of 30.4 metric tons on the 19th and 43.3 tons on the 22nd. The previous record was 22.0 tons on February 18 of this year.

As Chinese emptied the shelves in their own country, they also went south and swarmed shops in Hong Kong, sometimes in groups. Chow Tai Fook, the world’s largest jeweler by market capitalization, said some stores popular with Mainland Chinese ran out of gold bars and that demand had not been as strong since the late 1980s.
...

More: http://www.forbes.com/sites/gordonchang/2013/04/28/china-goes-gold-crazy-why-now/

 

[CharlesMcLain]

Crazy gold rush in China indeed!!

 

[rblong2us]

So is the demand for physical ramping up or tailing off ?

The msm seem to have got bored with it and all the gold bug reporting tries to talk it up, in the hope that this time we really can see a separation of gold and paper prices.

Does the open physical market have enough 'clout' to make a difference ?

 

[pmbug]

So is the demand for physical ramping up or tailing off ? ...

Best I can tell from watching Apmex inventories, retail demand appears to be tapering off. But I don't really have enough good (clear) data points to say definitively.

We won't know about the deep pockets until folks who watch the GLD, COMEX, LBMA inventories report on whether the gold stocks are still being depleted or not.

 

[Unbeatable]

Looking at the biggest UK site, they're back up to next day delivery again, but 80% of product is sold out.

For example the only 1 ounce silver coins they have are Chinese Pandas.
If you buy more than 100, you'll 'only' pay 47% over spot plus the 20% tax we have on silver here on top of that...

http://www.bullionbypost.co.uk/silver-coins/chinese-silver/1oz-chinese-panda-silver-coin/


I think it's game over already. But it might take another bank deposit confiscation in Europe to make the average European get zee gold/silver to really seal the deal.

 

[Aubuy]

I'm new to this forum. Does this kind of thing happen very often in PM?

 

[pmbug]

Not to my memory. There were a couple of periods post 2008 / Lehman when demand was strong and supplies for some products like Silver Eagles got tight, premiums rose and delivery delays were common, but it wasn't like this. No one was worried about COMEX/GLD/LBMA stocks and BRICS weren't hording local production and importing like they are now.

 

[Unbeatable]

http://www.zerohedge.com/news/2013-05-08/chinese-gold-imports-soar-monthly-record-insatiable-demand

Export data released by the Hong Kong Census and Statistics Department overnight showed, Chinese gold imports in March exploded to an all time record high of 223.5 tons.

It also means that since January 2012, China has imported an absolutely stunning 1,206 tons of gold. Putting this number in context, this is 20% more than the entire reporter official gold holdings of 1054 tons, and represents roughly half of the total 2500 tons of gold mined every year (a number which is set to decline as gold miners find current prices unsustainable and are forced to shut down production).

 

[Unbeatable]

Can't wait for the April numbers! As PMBug posted above, a lot of records broken on the Shanghai gold exchange in April!

"April imports will be stronger than March," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The world was buying gold and China was no different at all."

 

[DSAbug]

 

[DoChenRollingBearing]

...

NICE chart, Unbeatable!

NICE cartoon, DSABug!

***

I was able to take advantage of the price plunge in Au, but now I am out of FIAT$ for the moment. Maybe THAT is why demand has slacked off? People like me took all the money they could lay their hands on to by gold, and now they feel they have enough (for now...) and they need to wait for more money...

 

[benjamen]

http://www.sovereignman.com/finance/its-becoming-harder-to-buy-and-sell-gold-in-hong-kong-11790/

"1. Physical gold is hard to buy right now in Hong Kong. Hang Seng had only Australian Kangaroo nuggets in stock, and no Maple Leafs.

2. Selling your gold at a fair price if you have an emergency is getting tougher too. The paperwork and rules and regulations are becoming stricter, even in a freewheeling place like Hong Kong."

 

[pmbug]

Another chart on the Hong Kong import numbers:

 

[pmbug]

Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world's second biggest consumer of the precious metal, amid tight physical supplies.

Premiums for gold bars in Hong Kong touched a new all-time high of $6 an ounce over spot London prices, up from $5 last week. Singapore premiums rose to $5.

Banks in China were quoting up to $7 in premiums, two traders in Singapore said.

"China premiums remain high because of a shortage in supply of the physical metal," said a Hong Kong-based trader.

"Unless we see more supply coming into the market, or spot prices trading much above the current level, premiums will stay relatively high."
...

http://www.mineweb.com/mineweb/content/en//mineweb-gold-news?oid=191084&sn=Detail

 

[Unbeatable]

Well China's gold import numbers came out for April. It is the second biggest on record but I was still a little surprised it wasn't higher to be honest.

PMBug noted that

Volume on the Shanghai Gold Exchange, considered a proxy for the metal’s demand in China, surged, setting consecutive records of 30.4 metric tons on the 19th and 43.3 tons on the 22nd. The previous record was 22.0 tons on February 18 of this year.

Now maybe those numbers don't directly relate to import tonnage for the month, but setting MASSIVE consecutive import records you'd think...
ZH does offer an explanation and says...

“Some qualified banks used up their gold import quota in the first three months and weren’t able to get the paperwork done fast enough to bring in bullion in April,” said Tian Rui, vice president of the precious metals division at INTL FCStone Trading Co. “We might see higher imports in May because demand surged after the rout.”

http://www.zerohedge.com/news/2013-06-06/point-out-slump-chinese-gold-imports-chart

I know China often fudges their numbers to the upside and I don't know how possible it is to fudge Aprils gold numbers to the downside but I definitely think it would be in every bodies interest to do so...

If China posted a huge record month then the supply numbers just wouldn't add up to a 12 year old. This way Bloomberg gets to have headlines like

China’s Gold Imports From Hong Kong Slump on Quota Backlog

(Even though headline should be 'China imports 2nd highest ever on price dip!') & China keeps getting the West to sell them gold for a few more months...

 

[Unbeatable]

June 11, ten thousand people line up in front of a gold shop to buy gold. The buyers lined up during the three day Dragon Boat Festival

Sometimes one must see to believe, in this case believe just how massive the raw demand for the shiny, barbarous relic is in China during times of relative monetary stability (in this case the Dragon Boat Festival). Now assume runaway inflation as we saw in 2011 China, which may be unleashed by something as catalytic as the PBOC once again deciding to inject liquidity in its suffocating banking system and to revive growth in the stalling economy.

http://www.zerohedge.com/news/2013-...ina-ten-thousand-people-waiting-line-buy-gold

 

[pmbug]

A line 10,000 people long to buy gold? Inconceivable!

 

[Jay]

A line 10,000 people long to buy gold? Inconceivable!

PMBug, I hope you are being facetious...

 

[pmbug]

Sorry, I probably should have included a short vid clip to provide proper context:

 

[Jay]

Sorry, I probably should have included a short vid clip to provide proper context:

An inconceivable Montage - YouTube

man I need to get out more often (I rarely watch movies). I think I saw something from "Princess Bride" in there...

 

[Unbeatable]

In mainland China, the Shanghai Gold Exchange saw record volumes on Monday, while queues formed outside some jewellery shops in Beijing.

China is set to become the world’s No. 1 gold buyer this year – and it may be already. So far net imports through Hong Kong for the first five months of the year have totalled over 413 tonnes – double those of a year earlier when China imported just over 830 tonnes in the full year.

http://www.zerohedge.com/news/2013-...gh-hong-kong-jewellers-and-banks-face-supply-

 

[bushi]

A line 10,000 people long to buy gold? Inconceivable!

bullshit, it CLEARLY is auditions time for the next edition of "Chinese Idol" :rotflmbo:. See Chinese have their priorities right, too!

 

[Potemkin]

Chinese people are buying up massively and the government is not telling us how much their official holdings are...

What if China has already more than what the US is saying they have at the Fed's vault? (which might not actually be there...)

The BRICS may be preparing for that new currency, which could be gold-backed. A rival to the dollar... partial gold-backing is good enough as well...

 

[Unobtanium]

More on the Chinese buying spree. I don't believe we are going to see any of the info in this thread on NBC Nightly News.

http://goldsilverworlds.com/physical-market/what-is-driving-gold-now/

Chinese Demand

During May, gold imports into China jumped to the second-highest level ever. Demand for physical gold in Asia is the strongest it has been in 30 years, with bargain hunters using the lower prices to secure jewellery and gold bars. The demand has left many of Hong Kong’s banks, jewellers and even its gold exchange without enough yellow metal to meet demand.

The president of the Hong Kong Gold & Silver Exchange Society, Haywood Cheung, said the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold. “In terms of volume, I haven’t seen this gold rush for over 20 years,” he said. “Older members who have been in the business for 50 years haven’t seen such a thing.”

Chow Tai Fook, the Hong Kong-based company that is the world’s biggest jeweller by market capitalisation, reported that some stores in areas popular with mainland Chinese tourists had sold out of gold bars. It also stated that demand had not been this strong for gold products since the late 1980s.

At the same time, lines of people wanting to buy gold bars at Beijing’s largest gold store, Caibai, stretched as long as 10 metres last Friday.

 

[Unobtanium]

When this happens in the U.S. and Europe, it won't be too long before it is time to start selling some of your PMs.

 

[DSAbug]

When this happens in the U.S. and Europe, it won't be too long before it is time to start selling some of your PMs.

It will be under crisis like conditions.

 

[Unbeatable]

I love the Bloomberg headline & opening line...

http://www.bloomberg.com/news/2013-...rom-hong-kong-decline-as-demand-slows-1-.html

China’s Gold Imports From Hong Kong Decline as Demand Slows

China’s net gold imports from Hong Kong fell 4.8 percent in June as a slump in prices damped demand and the government curbed the use of bullion in financing deals.

Decline, fell, damped, slump and curbed. Oh no... Meanwhile if you read on...

Mainland buyers purchased 101 metric tons, after deducting flows from China into Hong Kong, compared with 106 tons a month earlier

China had another 100 ton + monthly net import! &...

The Shanghai Gold Exchange, China’s largest bullion bourse, delivered 1,098 tons to buyers in the six months through June, compared with 1,139 tons for the whole of last year

Yes they're on track to double their demand vs. 2012 and deliver over 2000 tons for the year in a world where scrap plus mining supply only equals 4100 tons!

Also this year that total may be as low as 3600-3800 tons this year because people aren't selling scrap... http://www.pmbug.com/forum/f2/used-gold-supply-heads-’08-low-sellers-balk-2383/

Gold scrap supply likely to drop up to 25%. Scrap bullion supply could fall by 300 to 400 tonnes in 2013 from about 1,600 tonnes last year, according to Marcus Grubb, managing director of investment research at the World Gold Council.

 

[Potemkin]

China has been "gold crazy" for a very long time...

They are also nuts about US bonds and US dollars overall. How crazy!

 

[Unbeatable]

No they haven't been "gold crazy" for a long time...

It is only in the last 3-4 years that their purchases have really picked up, this year in particular.

While they've also stalled on their relative holdings of US debt over the same period.

So all pretty much the exact opposite of

China has been "gold crazy" for a very long time...

They are also nuts about US bonds and US dollars overall. How crazy!

 

[pmbug]

Gold shipments to China from Hong Kong increased in July as importers took advantage of local prices that were an average 2.1 percent higher than global markets and as mainland investors bought jewelry and coins.

Net imports, after deducting flows from China into Hong Kong, were 113 metric tons, from 101 tons a month earlier, according to calculations by Bloomberg. ...

... Premiums paid by jewelers on top of spot prices on the Shanghai Gold Exchange to take physical delivery of the metal were an average $27 an ounce in China during July, according to calculations by Bloomberg.
...

More: http://www.bloomberg.com/news/2013-...-from-hong-kong-climb-on-physical-demand.html

 

[pmbug]

Looks like Bloomberg underestimated July's import numbers...

Even as the Indian government is seeking to restrict gold imports and is coming down hard on gold loan companies across the country, China could well be on its way to import 1,000 tonnes of gold for the whole year if recent buying trends continue.

China has imported through Hong Kong 129 tonnes of physical gold in July, from the 113 tonnes it imported in June, according to the Hong Kong Census and Statistics Department.

This is the second highest import level on record in a month and a year-over-year increase from 76 tonnes in July 2012. The July imports are also over and above the 518 tonnes of gold imports the nation already brought in the first six months of 2013, according to available data.

The country continues to buy at record levels, importing on an average, over 100 tonnes of gold every month for the last five months. ...

More: http://www.mineweb.com/mineweb/content/en//mineweb-gold-news?oid=204726&sn=Detail

 

[Unbeatable]

Apologies that a lot of my posts are usual copy & pastes from ZH, but it's the main site I read and this should be pretty big news, and about time...

"China Expected To Announce It Has More Than Doubled Its Gold Reserves", Shanghai Daily

China may soon announce an increase in its official gold reserve from 1,054 tons to 2,710 tons, Jeffrey Nichols, managing director of American Precious Metals Advisors, said.

Oh well: the period of quiet accumulation was fun while it lasted.

http://www.zerohedge.com/news/2014-...nnounce-it-has-more-doubled-its-gold-reserves

 

[pmbug]

2,710 tons? That sounds low. Real numbers are likely more than 4,000 tons by now.

 

[Unbeatable]

2,710 tons? That sounds low. Real numbers are likely more than 4,000 tons by now.

Yeah, I think if they announced a higher number then that it might break the fragile gold market.

At the same time, I think they have to announce something, because they haven't announced an official number in such a long time, and they've been importing so much...

So maybe 2710 tons is the lowest semi-believable/credible number they think they can get away with.

 

[ancona]

According to Harvey Organ [among many, many others] China is now the largest gold stash holder in the world. On a par-capita basis they are still pretty low in the rankings, but as an entity it is speculated that they have surpassed everyone.

 

[benjamen]

http://finance.yahoo.com/news/chinese-gold-demand-may-rise-20-2017-industry-041137552.html

China's yearly demand for gold is predicted to rise another 20%.

 

[pmbug]

I clicked the link to read the article. I didn't get very far. Someone made gold ladies underwear?

Also, Koos Jansen is reporting on SGE withdrawals and they appear to be down a bit from last year:

http://www.ingoldwetrust.ch/weekly-sge-withdrawals-dropping-ytd-585-mt

 

[mmerlinn]

http://www.ingoldwetrust.ch/weekly-sge-withdrawals-dropping-ytd-585-mt

Further down that same page I see this:

Mars Ipan

GENERAL CASE LAW ON JURISDICTION

“Jurisdiction can be challenged at any time.” Basso v. Utah Power & Light Co., 495 F 2nd 906 at 910.

“It is axiomatic that the prosecution must always prove territorial
jurisdiction over a crime in order to sustain a conviction therefor.”
U.S. v. Benson, 495 F.2d, at 481 (5th Cir., 1974).

“The law provides that once State and Federal Jurisdiction has been
challenged, it must be proven.” Main v. Thiboutot, 100 S. Ct. 2502
(1980).

“Where there is absence of proof of jurisdiction, all administrative
and judicial proceedings are a nullity, and confer no right, offer no
protection, and afford no justification, and may be rejected upon direct
collateral attack.” Thompson v Tolmie, 2 Pet. 157, 7 L. Ed. 381; and
Griffith v. Frazier, 8 Cr. 9, 3 L. Ed. 471.

“The United States is entirely a creature of the Federal
Constitution, its power and authority has no other source and it can
only act in accordance with all the limitations imposed by the
Constitution.” Reid v. Covert, 354 U.S. 1, 1 L. Ed. 2nd. 1148 (1957).

“The rights and liberties of the citizens of the United States are
not protected by custom and tradition alone, they are preserved from the
encroachments of government by express/enumerated provisions of the
Federal Constitution.” Reid v. Covert, 354 U.S. 1, 1 L. Ed. 2nd. 1148
(1957).

“The prohibitions of the Federal Constitution are designed to apply
to all branches of the national government and cannot be nullified by
the executive or by the executive and the senate combined.” Reid v.
Covert, 354 U.S. 1, 1 L. Ed. 2nd. 1148 (1957).

“Where rights as secured by the Constitution are involved, there can
be no rule making or legislation which will abrogate them.” Miranda v.
Ariz., 384 U.S. 436 at 491 (1966).

“Congress may not, by any definition it may adopt, conclude the matter, since

“Citizens may resist unlawful arrest to the point of taking an
arresting officer’s life if necessary.” Plummer v. State, 136 Ind. 306.

United states of America Constitution Article 1 section 9 No Bill of
Attainder or EX POST FACTO Law shall be passed. 2nd Amendment; shall NOT
be infringed!

They took an oath to uphold and preserve the constitution.. Perjury of oath is a FELONY! 18 U.S. Code § 1001

Brookfield Construction Co. v. Stewart, 284 F.Supp 94: “An officer
who acts in violation of the Constitution ceases to represent the
government.”

in Eisner v. Macomber, 252 U.S. 189 (1920), to wit:

Congress … cannot by legislation alter the Constitution, from which
alone it derives its power to legislate, and within whose limitations
alone that power can be lawfully exercised.

U.S. v Mersky (1960) 361 U.S. 431 a statute that regulates without
constitutional authority is a nullity even though it be published in the
books, recognized by the police and lowers courts, and even though it
be unchallenged for decades.

The Legislature, either by amending or otherwise, may not nullify a
constitutional provision Rost v. Municipal Court of Southern Judicial
District of San Mateo (1960)

“Every person (this includes EVERY government official) who under
color of law, deprives any citizen of rights, privileges, or immunities
secured by the United States Constitution is subject to civil and/or
criminal penalties pursuant to Title 18, United States Code, Section 241
and 242. Penalties include up to $10,000 fine and/or 10 years to life
imprisonment, or both, if death results.”

with more citations after that.

 

[benjamen]

http://finance.yahoo.com/news/china-allows-gold-imports-via-024746017.html

China is adding a third official gold import city (Beijing). The article also discusses how much gold China may now have, the timing of the next official gold holdings announcement (2009 was the last one), and what a big jump in their numbers would do to gold prices.

 

[pmbug]

Looks like they don't appreciate Koos Jansen, et. al. analyzing the SGE's numbers. It's "too transparent" for their liking.