Asian demand puts floor on gold price

[pmbug]

Gold continued its trend lower Tuesday, but falling prices are boosting demand out of India and China, according to analysts. ...
...
... lower prices are working in favor of the retail buyer in Asia, which suggests there could be a price floor in gold's recent selloff, said Commerzbank analyst Carsten Fritsch.

This is visible by looking at rising premiums in India and China. "Gold traders in India responded by demanding a premium of $2 per troy ounce on the official local price. The week before they had been forced to grant a discount of $18 per troy ounce. The higher demand is meeting with reduced supply after gold imports were postponed in anticipation of a possible cut in import tax that did not then materialise," Fritsch noted.
...
In China, premiums were also raised by local sellers, Fritsch added. "Traders in China raised their price premium to $16-27 per troy ounce from $12-15 in the previous week. Jewellery retailers there are replenishing their stocks following the New Year festivities," he said Tuesday.

The rising demand points to how price-sensitive gold buyers are in the world's top two gold-consuming nations.

What this means for the global price of gold is that the overall move down could be limited, Fritsch pointed out. "Though this does not mean that they are able to drive prices significantly up, they can preclude or at least slow any further price fall," he said.
...

February's lower gold price is waking up India and China demand, markets are eyeing FOMC meeting minutes this week

www.kitco.com

 

[nickndfl]

I was looking at a few 4-ducat restrikes @ 3% above spot.

 

[Peter89]

China’s gold imports surge to record high as appetite increases, middle class seek wealth security​

• China imported a record high 1,447 tonnes of gold for non-monetary use last year, with the value increasing ninefold from three years ago to US$90 billion
• China’s middle class are seen to be attempting to preserve their dwindling fortunes caused by the property market crisis and slumping stock market

China’s appetite for gold rose to record high levels last year, as investors sought to secure their assets and limit uncertainties caused by a weak yuan, an ongoing property slump and fears over a stock market rout.

Imports of gold for non-monetary use – products including gold jewellery – rose to 1,447 tonnes last year, breaking the previous record of 1,427 tonnes in 2018, according to the General Administration of Customs.

The weight marked a sevenfold increase from 2020, while the US$90 billion value represented an almost ninefold increase from three years ago.

Domestic sales in China also hit 1,090 tonnes of gold last year, according to the China Gold Association, with gold jewellery consumption increasing by 7.97 per cent year on year and purchases of gold bars and coins increasing by 15.7 per cent.

With limited access to overseas assets, China’s middle class are seen to be attempting to preserve their fortunes, which have dwindled amid the slumping property market.

“Facing the property and stock market slump, global geopolitical instability, and the fall of the Chinese yuan’s exchange rate, gold purchasing is currently the best way for Chinese residents to preserve their wealth,” said Peng Peng, executive chairman of the Guangdong Society of Reform.

China’s wealth-preservation society ups appetite for gold with record imports

China imported a record high 1,447 tonnes of gold for non-monetary use last year, with the middle class attempting to preserve their dwindling fortunes caused by the property market crisis and slumping stock market.

www.scmp.com

2 points
a) gold bars and coins are considered non-monetary...
b) these statistics don't consider imports of gold for monetary use

 

[CiscoKid]

Brother-in-law was about to pull the trigger on $10k worth of silver from one of those silver houses. They wanted nearly $40 an ounce. Talked him into going with five Maple Leaves from Apmex instead.

 

[Ttazzman]

I was looking at a few 4-ducat restrikes @ 3% above spot.

those are intresting coins.....very large diameter but seem very thin ....when i handle one i feel like it would be easy to bend ....i am a fan of 1 ducats and in the past they provided extra ordinary value in gold coins, ducat pic for fun LOL

 

[Goldhedge]

Brother-in-law was about to pull the trigger on $10k worth of silver from one of those silver houses. They wanted nearly $40 an ounce. Talked him into going with five Maple Leaves from Apmex instead.

He'll thank you later!

 

[CiscoKid]

He'll thank you later!

He was talking to someone at Rosiland Capital. He was ready to send them the money. Personally, I was willing to let him do it because he's an idiot liberal democrat, but I had my sister (who is not) to think of.

 

[pmbug]

 

[Peter89]

Chinese Wholesale Gold Demand Sets January Record​

Chinese gold demand kicked off 2024 with a bang.
Wholesale gold demand set a record in January. Meanwhile, assets under management by Chinese gold ETFs reached an all-time high.
China ranks as the world’s top gold consumer, and Chinese demand has a significant impact on the global gold market.

Gold withdrawals from the Shanghai Gold Exchange (SGE) hit 271 tons in January, the highest level on record. It was a 95 percent increase compared to a tepid 2023 and a 65 percent increase month-on-month.
Withdraws from the SGE represent wholesale gold demand in China.

Chinese Wholesale Gold Demand Sets January Record

Due to strong demand coupled with a stable gold price, assets under management by Chinese-based gold ETFs rose by $113 million to $4 billion in January. An all-time high.

goldseek.com

 

[Peter89]

China's Jan gold imports via HK gallop to 6-year highs on festive spirit​

China's monthly net gold imports via Hong Kong surged 51 per cent in January to their highest since mid-2018, official data showed on Tuesday, as customers amassed the precious metal in preparation for the Lunar New Year festival.

The Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing.
The People's Bank of China controls the amount of gold entering the country via quotas to commercial banks.

China's Jan gold imports via HK gallop to 6-year highs on festive spirit

:China's monthly net gold imports via Hong Kong surged 51 per cent in January to their highest since mid-2018, official data showed on Tuesday, as customers amassed the precious metal in preparation for the Lunar New Year festival."As local assets including equities and properties saw weak...

www.channelnewsasia.com

I admit I'm a little confused...
First, one thing are imports and another one are withdrawals (e.g. from Shanghai. S. previous post). Record imports doesn't mean record withdrawals... or does it?
Second, record imports via HK doesn't mean record imports into China, as "gold is also imported via Shanghai and Beijing". Right?

 

[nickndfl]

If all the gold in Ft. Knox is there then it's at most a 3 year supply. If othwrs wise up about gold then it's about one year's supply.

 

[Peter89]

If all the gold in Ft. Knox is there then it's at most a 3 year supply. If othwrs wise up about gold then it's about one year's supply.

If the gold in Fr. Knox is not for sale it's 0 years supply

 

[Peter89]

!

 

[pmbug]

At least six Chinese banks have raised investment thresholds for their gold savings accounts, in an attempt to warn retail investors of potential risks amid a price rally and growing demand for the safe-haven asset.

Starting Friday the Agricultural Bank of China Ltd. increased the minimum investment to 550 yuan ($76) from 500 yuan for one of its gold deposit products, according to a March 22 notice.
...

China moves again to restrain public's demand for gold | Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market

gata.org

I think Chinese people are aware that Chinese economy (and Yuan) have significant downside risks. They want gold.

 

[pmbug]

Chinese consumers are increasing their appetite for gold, seeking to protect their assets amid a volatile stock market, a depreciating yuan, and property doldrums, which analysts said would continue to boost international gold prices coupled with geopolitical uncertainties.

Consumers in China bought 308.9 tonnes (10.9 million ounces) of gold in the first quarter, representing a 5.9 per cent increase compared with the same period in 2023, according to data released by the China Gold Association on Friday.

Purchases of gold bars and coins, which largely reflect investment and hedging demand, surged by 26.8% year on year to 106.3 tonnes, while gold jewellery sales declined by 3% from a year earlier to 183.9 tonnes.

But China's domestic gold production rose by 21.2% to only 139.184 tonnes in the first three months of the year, with 53.2 tonnes produced with imported ores or materials, indicating an overreliance on overseas suppliers.
...

Chinese public is buying more than twice as much gold as the nation mines | Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market

gata.org

 

[WinkWink]

 

[pmbug]

 

[nickndfl]

The real estate market in China is imploding and the yuan is fixed to the $USD, but not to gold. Many Chinese citizens have created a mania believing the price of gold will continue to *increase while other assets implode.

 

[Viking]

The real estate market in China is imploding and the yuan is fixed to the $USD, but not to gold. Many Chinese citizens have created a mania believing the price of gold will continue to drop while other assets implode.

That ended in 2005, but it is pegged against a basket of currencies.

 

[nickndfl]

It (yuan) doesn't float.

 

[Viking]

It (yuan) doesn't float.

It is not “ fixed to the $USD,”. It is managed though.

 

[pmbug]

Chinese private sector gold imports accounted for 543 tonnes in the first quarter, while the People’s Bank of China (PBoC) added 189 tonnes to its reserves over this time horizon. Most of the PBoC’s purchases are “unreported.” China continues to be the marginal buyer in the gold market, driving up the price. I expect that China will remain a robust buyer of gold going forward in support of the price.

In my latest article on global gold flows from March 2024, “China Has Taken Over Gold Price Control from the West,” I showed that in 2022 China broke the peg between the US dollar gold price and “real yields.” Instead of being price sensitive China had become a driving force of the gold price. The data at my disposal ran until December 2023 which made me hesitant to conclude the sharp increase in the gold price since late February was also caused by the Chinese. However, as new data has been released, I can confidently say that China initiated the current bull market.
...

More:

Exceptionally Strong PBoC and Chinese Private Sector Buying Continues to Boost Gold Price

China continues to be the marginal buyer in the gold market, driving up the price. Chinese private sector gold imports were 543 tonnes in Q1 while the People’s Bank of China (PBoC) added 189 tonnes to its reserves.

www.gainesvillecoins.com

 

[SilverSamurai]

Sellers in the West
Feeding buyers in the East
Demand pwns supply

 

[searcher]

Singapore Set to Become the World's Gold Hub as Gold Shifts from West to East

Emerging market economies are consuming more gold, with most in Asia. Singapore's proximity to these markets positions it as the "fulcrum of this new balance."

goldseek.com

 

[Peter89]

Shenzhen's Shuibei, the biggest gold & jewellery market in the world



15kg silver ingots, 3kg gold bars being emotionlessly thrown around : )

 

[Viking]

Probably filled with tungsten for shipment to the west…

 

[nickndfl]

Guaranteed 100% genuine same planchett sovereigns and 2rands.

 

[Peter89]

Probably filled with tungsten for shipment to the west…

Nope, the Shuibei gold market is not an Exchange, it's a physical market. They don't send out, buyers have to go there, put it in the bag and bring it home. Those bars are real.
Besides, AFAIK there is no export of gold & silver out of China. It's verboten.


Peru's silver production is going straight to China



Translation
China's Zhejiang Yueqing City has the country's largest electroplating industrial park, which consumes more than 2,000 tons of silver every year! Data comes from the Shanghai Futures Exchange's public news. The main purpose of Chinese silver importers is to ensure the huge industrial silver, which now requires at least 9,000 tons per year! It is still increasing rapidly. Therefore, China went directly to Peru to buy all the silver ore and shipped it directly to China through the Port of Qiancai. Xi Jinping personally led a 400-person business delegation to Peru.

 

[pmbug]

As the New Year and the Spring Festival approach, the gold market in Shenzhen City, south China's Guangdong Province, is experiencing a peak seasonal demand.

Shuibei market, a gold jewelry manufacturing and trading hub in Shenzhen, consumer flow and gold sales are both seeing a spike.
...
"The foot traffic has increased by about 40 percent compared to last month. Especially on weekends, the crowd is so large that some salespeople struggle to keep up with demand," said Wu Qian, a gold retailer at Shuibei market.
...

Shenzhen's gold market sees consumption upsurge

As the New Year and the Spring Festival approach, the gold market in Shenzhen City, south China's Gu

www.bastillepost.com

 

[pmbug]

China's November net gold imports from Hong Kong more than doubled from the prior month, while the return of price premiums also suggests the world's top gold consumer is getting back into gold in a big way.

China imported a net 33.074 metric tons of gold in November, the Hong Kong Census and Statistics Department announced on Monday. This represents a 115% increase from the 15.414 tons recorded in October and is the highest level of net imports since April 2024.
...

More:

China's golden resurgence: Net imports via Hong Kong more than double in November, gold premiums rise in December

The Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.

www.kitco.com

 

[nickndfl]

No cap gains tax in USA should also floor prices. You would need to have brain damage at this point not to stack PMs.

 

[pmbug]

Banks in China started selling gold directly to the public about a month ago:

Post in thread '2025 Lunatic Fringe - Market and Trade Chat'

Jan 9, 2025

Oriental Ghost reports on a new wrinkle in China that is driving retail gold demand:

• pmbug

• 
• 

Now they appear to be sold out (from Chinese New Year holiday demand?):

Several Chinese banks have sold out their gold products after surging prices of the safe-haven asset fueled investors’ enthusiasm.

On the app of Industrial and Commercial Bank of China, Ruyi Gold bars of 5 grams, 20 g, 50 g, 100 g, and 200 g are out of stock, with only the 10 g option showing limited availability.

The gold spot price at the London Stock Exchange rose over 1 percent to an all-time record of USD2,942.71 per ounce yesterday, marking the eighth time this year that the price of the precious metal hit a new record.

The 10 g and 20 g Chuan Shi Zhi Bao gold bars of Agricultural Bank of China are sold out on the lender’s app, and the 100 g and 200 g ones are on a tight inventory. Meanwhile, the China Construction Bank app shows that only the 50 g and 100 g investment gold bars are available, priced at CNY688.80 (USD94.23) per gram.

Gold bars on the apps of Postal Savings Bank of China and Bank of China are in the preorder status.
...

Chinese Banks Run Out of Gold as Soaring Prices Spark Buying Frenzy

www.yicaiglobal.com

 

[nickndfl]

Chinese should add silver and platinum while it's still relatively cheap. It would benefit their citizens as a means of saving other than low interest bank accounts or their dying real estate market.