LAWRIE WILLIAMS: China: Jan SGE gold withdrawals up; Central Bank Gold reserves unchanged
China has announced both its latest SGE gold withdrawal figures for January and also an unchanged gold reserve figure which we find hard to believe.
January SGE gold withdrawals came to 223.58 tonnes, comfortably above the 2017 January figure of 184.41 tonnes, but withdrawal figures tend to be a little erratic at this time of year with traders and fabricators stocking up for Chinese New Year demand. The Chinese (Lunar) New Year falls a little later this year than last on February 16th. A week long holiday follows. It is a year of the Dog.
Some analysts equate SGE withdrawals to be equivalent to Chinese gold demand. Others question this, but regardless the figures are probably as good an indicator as any of overall demand strength on the Chinese mainland. It is obviously too early to tell if there is indeed anything significant in a single month's figures, but we will continue to keep a watchful eye on SGE gold withdrawal numbers as they are announced throughout the year.
Meanwhile the Chinese Central Bank has announced yet another month of unchanged gold reserves the 15th in a row. This will most likely mean that Russia will move ahead of China in fifth place among national gold holders assuming that it has added to its gold reserves in January. It is due to announce its latest gold reserve figure on or around February 20th.
But, as we have noted – most recently a month ago – see: China gold reserve increases – back to the bad old days non-reporting of its gold reserves except at multi-year intervals when it would announce large increases, was a pattern China adopted in the past. We fear it has returned to this non-reporting policy while continuing to build its reserves surreptitiously and will release its new total figure when is sees it as opportune to do so – perhaps not for another four or five years.
08 Feb 2018
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