Shanghai Gold Exchange Withdrawals

Shanghai Gold Exchange withdrawals were 59.88 tonnes of gold during the week ended August 28, 2015.

Two week withdrawals on the Shanghai Gold Exchange were 132.79 tonnes.

Total gold withdrawals on the Shanghai Gold Exchange year to date are 1,718.20 tonnes.

Withdrawals on the Shanghai Gold Exchange are running 37.4% higher than last year.

This is a breaking story-please check back for updated analysis and charts.

China’s Insatiable Demand for Gold

The Shanghai Gold Exchange (SGE) delivered 59.88 tonnes of gold during the week ended August 28, 2015. The prior week the SGE delivered 72.91 tonnes of gold.

The two week total of withdrawals is over 132 tonnes of gold and the year to date total is 1,718.20 tonnes, for an annualized run rate of approximately 2,600 tonnes.

Shanghai Gold Exchange Withdrawals During the Two Week Period Ended 8/28/2015 vs. Comex 2014 Deliveries

Withdrawals on the Shanghai Gold Exchange were 132 tons during the two week period ended August 28, 2015.

Volume of Gold Withdrawals on the Shanghai Gold Exchange

Shanghai Gold Exchange Withdrawals for the week ended August 28, 2015 were nearly 60 tonnes.

The volume of withdrawals of gold on the Shanghai Gold Exchange as of August 28, 2015, is running 37.4% higher than 2014 during the same period and 14.6% higher than 2013’s record pace.

Withdrawals of gold as of August 28, 2015 on the Shanghai Gold Exchange are running 37% higher than last year and nearly 15% higher than the record pace set in 2013.

China is becoming the center of the Asian gold world. A $16 billion China Gold Fund was announced in May and the Shanghai Gold Exchange continues to establish itself as viable competitor to the gold trading centers in London and Chicago. China’s gold imports, trading and mining production are one of the cornerstones of China’s de-dollarization/Yuan strengthening initiatives that focuses no so much on selling U.S. Treasuries but creating alternative financial systems like the Asian Infrastrucure Investment Bank.

China is widely believed to be making a play for inclusion in the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs) Program later this year. If China fails to gain inclusion in the SDR, its recent initiatives to strengthen its currency and gain greater acceptance of the Yuan may provide a strong alternative to the IMF regime.

China Updates its Gold Holdings

China recently announced their first update to their official gold holdings since 2009. The People’s Bank of China announced that their gold holdings had climbed from 1054 tons to 1658 tons, making China the fifth largest gold holding nation in the world.
China chose to incude six years worth of gold accumulation (over 600 tons) all in the month of June.

Last month China reported that they added 19.3 tons (610,000 ounces) of gold to their reserves in July bringing their total to 1,677 tons (53.93 million ounces).

Chinese gold reserves grew by 610,000 ounces in July.

China’s recent update to its gold holdings put it in fifth place among gold holding nations.

Many suspect that China has far more gold than they have reported.

Click here for an explanation on where China’s gold might be.

How does all that gold get to China?

The Bank of China also recently joined the auction process at the London Bullion Market Association where the price of gold is determined.

In addition, the new Chicago Merchatile Exchange futures contract for Hong Kong Kilobars has experienced withdrawls of nearly five tons of gold a day since it began in mid March earlier this year. As of August 27, 2015, 448 tons of gold have been withdrawn pursuant to this program for an annualized run rate over 1,200 tons of gold a year.

COMEX Hong Kong Gold Kilobar Withdrawals Through September 4, 2015

Comex Hong Kong gold kilo bar withdrawals have been averaging over five tons of gold a day and were over 13 tons on September 4, 2015.x

The Bank of China also recently joined the auction process at the London Bullion Market Association where the price of gold is determined.

China is the world’s largest gold producer:

China is the world’s largest gold producer with mining production over 2,000 tons the past five years. China has mined 228.7 tons of gold during the first six month of 2015.

In addition to the vibrant Shanghai Gold Exchange and increasing world leading gold mining production, China is also the world’s largest gold importer. Here is a chart showing the volumes of gold traded on the Shanghai Gold Exchange vs. gold imported through Hong Kong as of April 2015.

China imports large amounts of gold through Hong Kong.

China also imports unreported amounts of gold through Shanghai.

All charts, other than the Chinese gold mining production chart, courtesy of Nick Laird.