Shanghai Gold Exchange Withdrawals – Week Ended October 2, 2015

Shanghai Gold Exchange Withdrawals.

The Shanghai Gold Exchange was closed for Golden Week.

Total gold withdrawals on the Shanghai Gold Exchange year to date are 1,958 tonnes.

Hong Kong gold kilobar withdrawals pass 567 tonnes in 2015.

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China and Gold

We will update the Shanghai Gold Exchange withdrawals next week. In the meantime, here is an update on China and gold.

COMEX Hong Kong Gold Kilobar Withdrawals Through October 7, 2015

The Chicago Mercantile Exchange futures contract for Hong Kong Kilobars has experienced withdrawls of an average of more than five tons of gold a day since it began in mid March earlier this year. As of October 7, 2015, over 567 tonnes of gold have been withdrawn pursuant to this program since March 2015 for an annualized run rate over 1,200 tonnes of gold a year.

hong kong kilo bar withdrawals October 7, 2015 chart

Comex Hong Kong gold kilo bar withdrawals have passed 567 tonnes since March 2015 and passed 18 tonnes on three trading days in September.

China Updates its Gold Holdings

In July 2015, China 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.

In August 2015, 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). In September 2015, the China updated their August gold reserves, indicating that they had added 16 tonnes of gold to their reserves, bringing their total to over 1693 tonnes.

Despite an overall decrease in its reserves in September(see chart below), China has been adding gold. Earlier this week, China reported that they had added fifteen tons of gold to their reserves in September.

Chinese gold reserves as of September 2015 chart

Chinese gold reserves grew by 15 tonnes in September.

Chart of top 20 gold holding nations as of October 2015

According to the World Gold Council, China holds the fifth most gold of any nation. China added fifteen tons of gold in September that are not included in the chart above.

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

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

Chinese President Xi Jinping recently confirmed the practice of moving the People’s Bank of China’s reserve assets to other entities in China: “some assets in foreign exchanges were transferred from the central bank to domestic banks, enterprises and individuals” This might explain where some of China’s gold hoard, that many suspect they posses but have not reported as reserves, may be located.

How does all that gold get to China?

China Requests Inclusion in the IMF’s Special Drawing Rights Again

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. Earlier this week China made a renewed bid to for its currency, the Yuan to be included.

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.

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

Chinese Foreign Reserves

Chinese foreign reserves have been falling, mainly because they have been selling U.S. Treasuries, while continuing to add gold.

Chinese foreign reserves through september 30 2015 chart

Chinese foreign reserves have been declining mostly as a function of a reduction in their U.S Treasury holdings.

China is the world’s largest gold producer:

Chinese mining production chart

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.

Volume of Gold Withdrawals on the Shanghai Gold Exchange

Volume of gold withdrawals on the Shanghai gold exchange 2009-2015

Shanghai Gold Exchange Withdrawals for the week ended September 25, 2015, were over 65 tonnes.

The volume of withdrawals of gold on the Shanghai Gold Exchange as of September 25, 2015, was running 37.2% higher than 2014 during the same period and 17.9% higher than 2013’s record pace.

shanghai gold exchange week 39

Withdrawals of gold as of September 25, 2015, on the Shanghai Gold Exchange are running 37% higher than last year and 18% higher than the record pace set in 2013.

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 August, 2015.

Chinese gold imports through Hong Kong as of August 2015 chart

China imports large amounts of gold via Hong Kong.

China also imports unreported amounts of gold through Shanghai.

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All charts, other than those labeled “Smaulgld”, courtesy of Nick Laird.

*Gold Mining Production Source:2014 Gold Year Book published by CPM Group. There are various estimates of global gold mining production ranging from 2,600 tons to 3100 metric tons.

Shanghai Gold Exchange Data source GoldMinerPulse

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Further Reading:

Shanghai Gold Exchange Withdrawals (weekly archive)

China Devalues the Yuan

Comex Gold Deliveries vs the Shanghai Gold Exchange

Gold Continues its Journey From West To East

Shanghai Gold Exchange vs Comex Gold Deliveries

Gold ETF Holdings vs the Shanghai Gold Exchange

China and Gold

India and Gold

Russia and Gold

Gold and Silver Price Manipulation – Suspected

Gold and Silver Price Manipulation – Actual

Gold Reserves by Country – Top Twenty

Gold Moves West to East Part 1

Gold Moves West to East Part 2

Gold ETF Holdings on the Rise

Chinese vs. United States Gold Demand

Chinese Gold Production

China Hoards its Gold Production

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