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East Asia Geared Up For RMB Gold Trading

Weekly withdrawals from the Shanghai Gold Exchange (SGE), which equals Chinese wholesale demand, have been nearly flat for four weeks in a row. 33 metric tonnes have been withdrawn in week 32 (August 4 – 8), up a modest 4.2 % w/w. Year to date 1,127 tonnes have been withdrawn, annualized 1,831 tonnes.
 
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Global Gold Trade Declines In H1 2014

After having seen unprecedented amounts of physical gold moving across the globe in the aftermath of the goldprice collapse in April 2013, trade has been less robust in the past few months. In 2013 the UK net exported 1424 metric tonnes, Switzerland gross imported 3061 tonnes and gross exported 2777 tonnes, Hong Kong gross imported 2239 tonnes and gross exported 1642 tonnes, and China net imported 1540 tonnes. Gold trade in the first half of 2014 is down form these extreme levels, mainly in the second quarter.

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Chinese Gold Demand 1094 MT YTD, Silver Premium At Record High

First let’s go through the Chinese SGE report published on August 8, which covers week 31 (July 28 – August 1). The total volume of gold traded on the Shanghai Gold Exchange (SGE) was 258 tonnes, of which 147 tonnes were traded as the spot deferred contracts Au(T+D) and mAu(T+D), the open interest closed at 141 tonnes. Total deliveries of the spot deferred contracts accounted for 55 tonnes in this week, gold withdrawn from the SGE vaults, which equals Chinese wholesale gold demand, accounted for 32 tonnes.

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HMRC And Eurostat Alter Historic UK Gold Trade Data

It was in August 2013 when I started digging into UK gold trade data. While at the time China was importing unprecedented amounts of gold, through customs data I was able to track the source all the way back to the UK, home of the London Bullion Market. In 2013 the only available database for UK gold trade was Eurostat. When downloading the numbers from 2013 and all the years before something quite remarkable appeared to me. According to Eurostat the UK imported 614 tonnes of gold in August 2008 and 1,352 tonnes in September 2008, just from one country; Germany.

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Guest Post: 5 Chinese Ghost Cities That Came Alive

By Wade Shepard from Vagabond Journey, @vagabondjourney
 
Reports of the world’s most populated country having tens of millions of empty apartments and dozens of cities without people sounds like a sick twist of irony. But images of empty streets, barren skyscrapers, and thickets of brand new high-rise apartments housing nobody have been compulsively aired to a global audience that seems to have an insatiable appetite for Crazy China Stories. The dominant angle is that four decades of overzealous growth is starting to catch up with China and that the country’s irresponsible development may become the harbinger of the next global economic meltdown.

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Chinese Gold Demand 1063 MT YTD

For ten days I’ve been on vacation without internet, hence I missed one week to report on withdrawals from the Shanghai Gold Exchange (SGE) vaults. Here is a quick overview of what happened in the Chinese gold market in week 29 and 30.
 
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Massive Gold Deposit Found In Xinjiang Province China

In ​China’s Xinjiang Uygur Autonomous Region, the largest province in China, there has been a massive gold deposit discovered, according to Xinhua News. At least 127 tonnes has been found in resource rich Xinjiang, said the regional bureau of geology and mineral exploration and development.​ The deposit is located in Ulugqat near Kyrgyzstan in west Xinjiang​. Cui Hongbin, head of exploration team, expects total reserves may even exceed 200 tonnes.
 
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Chinese Gold Demand 998 MT YTD

According to the SGE reports published every friday on the previous trading week, Chinese wholesale gold demand year to date, as measured by SGE withdrawals, came in at 998 metric tonnes at the end of July 11 - at the time of writing it surely has passed 1000 tonnes.
 
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India Imported 713 MT Of Silver In April, 1921 MT YTD

Precious metals analysts have received a few gifts from the authorities this year. In January the Swiss Customs Administration (SCA) decided to disclose their gold trade data country specific (previously only the total import and export numbers of bullion were available), also in January British customs (HMRC) decided to add gold in their trade database (in previous years UK gold trade could only be tracked through Eurostat), and this week the Indian customs department (DGCIS) published their trade statistics of April with full disclosure of the exact tonnage of gold and silver that was imported and exported.

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ICBC: A New Global Currency Setup Is Being Conceived

At the LBMA Bullion Market Forum in Singapore on June 25, 2014, two very important speakers attended; Xu Luode, chairman of the Shanghai Gold Exchange, and Zhou Ming, General Manager of the Precious Metals Department at ICBC. Me and Torgny Persson have written about the speeches from Xu and Zhou in previous posts, in this post we will take a closer look at what Zhou said, based on what Chinese media have written about it (whereas Western media are reluctant to cover this).

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Chinese Gold Demand 973 MT YTD, Copper In Backwardation At SHFE

From now on I will also be writing blog posts at BullionStar.com. I’ve tried to make a living from donations and ads on this website, but it didn’t work out. That’s why I decided to expand my activities and to write for BullionStar.
 
If you go to the BullionStar homepage you can find my latest posts on gold, silver and related topics in the sidebar under de header Articles. We just got started and still have some work to do on the structure and graphics, but I’m confident it will turn out great!

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How Long Will People Trust Fiat Money?

I had an interesting conversation with a central banker a couple of days ago. He’s a friend of a friend and works at the Dutch central bank, an expert in fiat money – will be working at the ECB next month. I invited him for drinks to ask him about banking in general and the Turkish banking system (more on that in a future post). I was very happy to talk to him as it’s always valuable to get information from professionals.

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Does The PBOC Purchase Gold Through The Shanghai Gold Exchange?

Nope – that’s my answer. It’s my assumption the People’s Bank Of China (PBOC) does not buy any gold through the Shanghai Gold Exchange (SGE), for a number of reasons. In previous posts I’ve speculated about these reasons, here’s a recap; from Koos Jansen (April 15, 2014):
 
The main objectives for the PBOC to accumulate gold are:
 

Supporting the renminbi for its internationalization (adding trust and credibility)
Owning hard currency as the cornerstone of capitalism.
Owning reserves that protect the Chinese economy from external/internal shocks and inflation.

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Chinese Gold Demand 947 MT YTD

Chinese gold demand, as measured by SGE withdrawals, accounted for 27 metric tonnes in week 26 (June 23 – 27), year to date the counter stands at 947 tonnes. A quick calculation tells us 639 tonnes (SGE withdrawals – scrap – mining) had to be imported for this, annualized 1278 tonnes. Note, these are estimates. For a clear structure of this blog I will expand in a separate post on a recent article by Reuters titled “China gold imports may drop 400T hit by financing curbs”.

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Does Wall Street Even Notice That The Emporer’s Not Wearing Any Clothes?

Written by Chris Marcus, Arcadia Economics.
 
There are several aspects about working in today’s financial industry that are less than perfect, although gaining an insight into how many on Wall Street think and why they make the decisions that they do is certainly one of the positives. In fact what many on the outside often have a hard time understanding is that most on Wall Street are in reality somewhat oblivious to massive bubbles that the Federal Reserve has inflated, and that can make things confusing when you don’t factor it in properly.

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Guest Post: Holding The metals In A Post-Western World

Written by roguefaction
 
A recent Chairman of that private corporation in control of the finances – perhaps even, the destiny – of the USA for the past 100 years, famously referred to the yellow metal as “a barbarous relic”. Although this Ph’d prophet of policy-managed markets has hardly been a fount of wisdom in the course of his career… in this case he stumbled upon a truth.
 
Yes. Bernanke got it right! Gold has all the attributes of  a primitive thing – and as such belongs in essence to a different cycle in humankind’s journey.

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Did ABN AMRO Default On Its Gold Obligations?

On April 1, 2013 ABN AMRO sent a letter to its gold account clients that stated ABN AMRO would no longer offer physical delivery of precious metals.
 
 

 
 
 
 
Because I’m Dutch (the letter is also in Dutch), this looked like a default. The translation:
 
 
Changes in the handling of orders in precious metals
From April 1, 2013 ABN AMRO has a new custodian for the precious metals gold, silver, platinum and palladium. This is why we will change the way we handle and administer your investments in precious metals.

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Guest Post: Are The Chinese Ghost Cities Really Empty?

“China is the most talked about, but the least understood”, was recently being said on CNBC. I fully agree – from what I know of the Chinese gold market.
 
Western reporting on China swings from the most powerful economy after the US, that will soon take pole position, to the biggest financial bubble on the face of the earth that will soon implode. One of the most important elements of the Chinese economy that’s being discussed is their real estate market (the Chinese ghost cities).

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SGE Withdrawals 36 MT in Week 25, YTD 920 MT

Robust demand at the Shanghai Gold Exchange in week 25 (June 16 – 20), physical gold withdrawn from the vaults accounted for 36.3 metric tonnes, according to the Chinese SGE weekly report published last friday.
 
 
 
 
 
In my opinion Chinese (wholesale) demand, that equals SGE withdrawals, is still trending upward (if we ignore the variant demand from April to November 2013 due to the drop in the price of gold). In the chart below there is a clear pattern in SGE withdrawals; around every new year and the Chinese lunar year there is a spike in withdrawals, this is due to Chinese tradition to buy gold as a gift in this period.

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India Expected to Cut Gold Import Duties

Play the video in slow motion and fish for clues about Indian gold import duty cuts.
 
 

 
 
Merill Lynch has said in a note it expects the government to lower the import duty on gold in India by 2 % on a short notice. If gold import duties are being cut, now at 10%, that would likely increase (official) Indian gold import.
 
We’ve been hearing these rumors about Modi, India’s new prime minister, to cut gold import duties for weeks now.

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Jim Rickards: No Exit For The Fed

Written by Jim Rickards
 
The Federal Reserve, the central bank of the U.S., is nearing the end of its ability to manipulate the U.S. economy without producing consequences worse that those it set out to avoid in 2008. The Fed has no good exits from seven years of market manipulation. If it continues its current policy of reducing purchases of assets, the so-called “tapering,” it risks throwing the U.S. into a recession. If it reverses course and pauses the taper and later increases asset purchases, it risks destroying confidence in the dollar among foreign creditors of the U.S.

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