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LAWRIE WILLIAMS: Chinese gold demand up a little y-o-y but still well down on 2015

When we talk Asian demand and gold flows from West to East we are largely looking at China and India, so year-on-year statistics are hugely important when trying to assess the state of the global gold supply/demand balance.  So far this year Indian gold demand has been substantially above that of a year ago, although perhaps could be a little anomalous because of purchases made ahead of the imposition of that country’s Goods and Services Tax (GST) which came in at 3% on gold as from July 1st.

Chinese demand – as represented by withdrawals from the Shanghai Gold Exchange (SGE) – had appeared to have slipped back marginally in the five months to end May (see: Chinese gold demand falling, not rising), but bigger withdrawals in June – just announced – have redressed the balance, and year to date withdrawals are now a little up on the figure for last year (by 1.2%) but still down around 16.5% on the record figure recorded in the first six months of 2015.

As we’ve noted here before it is somewhat contentious whether SGE withdrawals are a true measure of Chinese gold demand – the major precious metals consultancies disagree. Yet they all seem to come up with different reasons to dispute this.  But on our reckoning it’s a pretty good measure as the annual SGE withdrawals figure corresponds quite neatly with the sum of known Chinese gold imports, plus Chinese domestic gold production plus a contingency for scrap and imports from gold producing nations which do not publicise their gold export figures on a country by country basis.  In other words, SGE withdrawals come in at close to known and estimated gold flows into China.

Table: SGE Monthly Gold Withdrawals (Tonnes)

Month

2017

2016

2015

% change 2016-2017

% change 2015-2017

January

184.41

225.08

255.42

- 18.1%

 -27.8%

February*

148.24

107.60

156.36

+37.8%

-5.2%

March

 192.25

183.24

213.35

 +4.9%

 -9.9%

April

 165.78

171.40

195.45

 -3.3%

 -15.2%

May

 138.08

147.28

162.15

 -6.2%

 -14.8%

June

 155.51

138.51

195.67

 +12.3%

-20.5%

July

 

117.58

285.50

 

 

August

 

144.44

265.27

 

 

September

 

170.90

259.98

 

 

October

 

 153.25

176.29

 

  

November

 

 214.72

202.71

 

  

December

 

 196.37

228.21

 

    

Year to date

984.27

972.81

1178.40

+1.2%

- 16.5%

Full Year

 

 1,970.37

2,596.37

 

 

Source: Shanghai Gold Exchange, Lawrieongold.com

 

 

04 Jul 2017

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London – recently described as the World’s No. 2 University (after MIT).

e: lawrie.williams@sharpspixley.com

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