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LAWRIE WILLIAMS: SGE gold withdrawals picking up but well down y-o-y

It’s taken a few days longer than usual for the Shanghai Gold Exchange (SGE) to report its eptember gold withdrawals figure – no doubt as an after-effect of the week long Golden Week  holiday which meant the Exchange was closed for most of the first week of October.  The latest figures did show though that withdrawals that month were comfortably higher than in August, but still well down on those for September 2015 – but 2015 was a huge record year for SGE withdrawals.

Shanghai Gold Exchange Monthly Gold Withdrawals (Tonnes)

Month

2016

2015

2014

% change 2015-2016

% change 2014-2016

January

225.08

255.42

246.00

- 11.8%

-8.5%

February*

107.60

156.36

171.67

- 31.2%

-37.3%

March

183.24

213.35

146.56

-14.1%

+25.0%

April

171.40

195.45

129.59

-12.3%

+32.2%

May

147.28

162.15

129.34

-9.2%

+13.8%

June

138.51

195.67

128.03

- 29.2%

+8.2%

July

117.58

285.50

137.53

- 58.8%

-14.4%

August

144.44

265.27

161.95

- 45.6%

-10.8%

September

170.90

259.98

202.43

 -34.3% -15.6%

October

 

176.29

201.11

   

November

 

202.71

212.49

   

December

 

228.21

235.66

   

Year to end September

1,406.03

1,989.15

1,453.10

-29.3%

-3.2%

Full Year

 

2,596.37

2,102.36

   

Source: Shanghai Gold Exchange, Lawrieongold.com

As can be seen from the above table, SGE gold withdrawals for the first three quarters of the year are running around 29% lower than a year ago, but the figures still remain substantial in terms of overall global gold flows.  Some equate SGE gold withdrawals to total Chinese gold demand – others suggest it may overstate the true picture, although known gold imports plus Chinese new mined gold production together with a relatively small recycling figure put total Chinese demand around the 2,000 plus tonne level – which corresponds much more closely with the SGE withdrawals totals and remains far higher than that of the mainstream analysts like GFMS and Metals Focus which put the figure at around half of that.  But then, much depends on what is included in demand figures with the mainstream analysts tending to ignore ‘consumption’ by the Chinese banking sector for financial transaction purposes - and those figures can be substantial.

Regardless of the accuracy or otherwise of the SGE figures, they do at least tend to confirm that Chinese gold demand has been slipping so far this year, in line with virtually all recent analyses – but it does appear to be picking up, although still not to last years’ exceptionally high monthly levels at this time of year.  Currently we are looking at a projected total for the year of around 1,875 tonnes, but with a possible build-up in demand ahead of the Chinese New Year, one can’t rule out another 2,000 tonne full year total – similar to 2014.

21 Oct 2016 | Categories: Gold

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