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LAWRIE WILLIAMS: Chinese gold demand well up on 2020 but still below 2019

The Shanghai Gold Exchange (SGE) has now released its gold withdrawal figures for May and while they remain substantially higher than in the same month a year earlier, they still remain comfortably behind thaose of the same month in 2019.  The indication therefore is that although the nation’s gold demand is well up year on year as China recovers from the Covid-19 pandemic, it is still lagging well behind that of earlier years.  Perhaps some of the comments regarding a big pick up in Asian demand are a little premature.

If one examines the table below of month-by-month SGE gold withdrawals, which we see as a strong guide to China’s non-governmental gold demand, though there should still be a degree of optimism for the gold investor.  In 2019 - the last pre-pandemic year - gold demand as expressed by SGE withdrawals appeared weak in the second half of the year.  That is compared with earlier figures, particularly given that the full year withdrawals total in 2019 at 1,642 tonnes was itself substantially lower the plus 2,000 tonne levels seen in the preceding four years.  While there seems to be little doubt now that the 2021 full year gold withdrawals total will exceed the 1,205 tonnes total of 2020, it still has a long way to go to catch up with those of the final years of the previous decade.

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 five months of the year

What should be encouraging, though, is that so far this year SGE month by month gold withdrawals have exceeded the month-by-month figures each month compared with a year earlier indicating that Chinese gold demand is definitely on the up this year. Extrapolating the year to date figures over the remainder of the year, assuming demand holds up, we could well be back to a similar year-end total to that of 2019.  This may be far short of the 2014-2018 gold consumption totals but does indicate that Chinese gold demand may be on the way back to its previous dominant levels.

This is not before time in terms of gold’s supply/demand fundamentals.  There are signs that demand in the world’s No.2 gold consumer, India, may be wavering in the face of the high pandemic infection rates in that nation.  There does seem to have been something of a turnaround in the gold ETF position which will be helpful, with inflows currently replacing the outflows seen in Q4 2020 and Q1 this year.  There is also anecdotal evidence that central bank interest in gold may be rising, but this needs to be confirmed in real figures.  Given that central bank demand tends to be price sensitive such projections may prove to be premature, given gold’s upwards price move in May.

07 Jun 2021 | Categories: Gold, China, India

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