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LAWRIE WILLIAMS:Chinese Gold Assoc figures equate domestic gold demand to SGE withdrawals

It seems to take an awful long time for the publication to appear, but now the Chinese Gold Association (CGA) has published, in Chinese, its 2014 Gold Yearbook and its figures for China’s gold demand that year, and for China’s gold imports, differ strongly from those put out by major precious metals consultancies such as GFMS (which also provided data to the World Gold Council that year), Metals Focus (which is current data provider for the WGC), and CPM Group – the most prominent U.S. based precious metals consultancy.  The report on the latest CGA figures to be published came from who else but precious metals chart guru, Nick Laird of, who monitors China figures extremely closely, and who also published an image from the yearbook showing the actual table from the report

For 2014 for example, the WGC (whose figures seem to be taken as gospel by the world’s major media outlets) reported mainland Chinese gold consumption that year at 813.6 tonnes.  The CGA yearbook stated the total Chinese gold demand figure at 2,106 tonnes – which is actually extremely close to the Shanghai Gold Exchange (SGE) withdrawals figure for the same year at 2,102 tonnes.  (For 2013 CGA total demand figures were also almost identical to SGE withdrawal figures for that year.)   Now while the categorisation of what should actually be included in the WGC consumer demand figure may differ somewhat from what is included in the CGA total demand figure, the 2014 difference of 1,292 tonnes between the two sources stretches belief.  Either the WGC (using GFMS figures) got it hugely wrong, or the China Gold Association is including all kinds of things which the WGC isn’t in its calculations.

But, to add weight to the veracity of the CGA figures is the reported total of Chinese gold imports that year (1,294 tonnes) plus the amount of gold produced by China’s own domestic industry – 462 tonnes (figure from Metals Focus) – which between them add up to 1,756 tonnes.  Add in 350 tonnes or so of recycled gold and you have a figure which equates closely to the CGAs 2,106 tonnes or the SGE withdrawals figure of 2,102 tonnes.  If this does not in reality represent Chinese demand, then one might ask where on earth this gold is going given that China prohibits gold exports.

This direct correlation between SGE withdrawals and China’s actual gold demand is a point China gold follower Koos Jansen, writing on, has been making for a couple of years now – and he has explained in detail in some of his past articles.

Yet another anomaly from the WGC figures.  Indian consumption in 2014 was estimated at 842.7 tonnes – in other words greater than that of China’s 813.6 tonnes - which the world media seized on in reporting India being the world’s largest gold consumer that year.  In parallel India’s gold imports were put at 855 tonnes (imports plus recycling plus other sources) – which is very close indeed to the reported Indian consumption figure. Yet the Chinese figure for imports plus domestic production (India only produces about 2 tonnes of gold a year itself) were the above stated 1,756 tonnes (ignoring scrap supply).  Thus India and China were treated hugely differently by the gold consultancies and the WGC.  This is an enormous anomaly which needs a detailed explanation by the WGC and the consultancies rather than just being glossed over in their more detailed gold yearbooks.

So onwards to the latest full year.  As we have reported on these pages, SGE total gold withdrawals for 2015 came to a massive new record of 2,596 tonnes, of which around 470 tonnes will have been from domestic gold production.  On the basis of previous CGA data then it seems likely that the Chinese Gold Association annual figure for domestic mainland gold demand will be around 2,600 tonnes.  We are certain the 2015 WGC figure when it is announced will again be hugely short of this tonnage – almost certainly by more than 1,000 tonnes.

19 Jan 2016 | Categories: Gold, China

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