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LAWRIE WILLIAMS: Chinese gold demand slips in July

05 Aug 2021

We had been anticipating a slight fall-off in Chinese gold demand in july following low Swiss gold export figures to mainland China and Hong Kong (See: Swiss gold exports to China and India at very low levels in June) and that was confirmed with lower Shanghai Gold Exchange (SGE) gold withdrawal numbers reported for the July month too (see table below). 

Despite disagreement on our take on the importance of these withdrawal figures in some other analytical quarters we have noticed that they usually correspond closely to known Chinese gold flows calculated from a combination of known gold imports from gold producing nations which publish country-by-country gold export statistics, plus China’s own domestic monthly gold production, plus a small allowance for scrap conversion.  As regularly published figures, SGE gold withdrawal figures make for an excellent guide to the state of the Chinese gold market at any given time.

Table: China SGE Monthly Gold Withdrawals 2019-2021 (Tonnes)





% change 2020-2021

% change 2019-2021
































































Full year




 Source:  Shanghai Gold Exchange, Sharps Pixley.

*Months incorporating Golden Week holidays when SGE closed for a week

** Cumulative totals as reported by SGE for first seven months of the year

Although the July gold withdrawals number is still higher than in the COVID affected 2020, it was below the previous month’s  level nd well down on the pre-COVID  2019 figure, which suggests Chinese gold consumption still has a way to go to regain the stronger late 2010s figures,  Domestic gold output appears to be falling too, although the country remains the world’s largest gold producer, but Russia and Australia may be closing the gap.  The former, in particular, could benefit from the exploitation by the country’s top gold miner, Polyus Gold, of the Sukhoi Log deposit – thought to be the world’s largest unexploited gold resource..  However first production from the $2 billion plus project is still around five years away at the earliest,  At full output Sukhoi Log  could add around 50 tonnes of gold a year to Russia’s annual gold output.

At the moment Chinese demand is well on track to exceed last year's depressed figures,  However it remains, for the moment, well short of the 2019 cumulative total, but 2019 ended weakly - perhaps the coronavirus was having an impact even earlier than reported!  We suspect that, assuming figures hold up, 2021 total Chinese gold demand could come in at around the 2019 level of a little over 1,640 tonnes and well ahead of last year's 1,205 tonnes.

China and India remain the world’s two biggest gold consumers.  India too has seen gold imports fall, probably as a result of the horrendous coronavirus infection figures seen earlier in the year.  However, according to the latest figures from the country’s public health authority, infection transmissions appear to have come down sharply and there are indications that gold imports may have picked up considerably in the past month or so.

It also appears that the big gold ETF outflows seen in Q1 this year have now stabilised, with inflows pretty well matching outflows.  As a result the gold price appears to have steadied somewhat, but has remained rangebound mostly in the $1,800 - $1,820 levels.  It could be poised for an upwards  breakout this month according to some observers.

05 Aug 2021 | Categories: Gold, China, Russia, India