China Goes Gold Crazy

pmbug

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

rblong2us

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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 ?
 

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Unbeatable

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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

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

pmbug

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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

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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

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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."
 

DoChenRollingBearing

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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...

:gold: :gold:
 

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pmbug

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Another chart on the Hong Kong import numbers:

 

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

Unbeatable

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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...
 

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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

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

pmbug

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

 
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