The Shanghai Gold Exchange Reports Over 1,800 Tons of Gold Withdrawn through November.
While gold demand at the U.S. Mint has been dismal this year, gold demand as evidenced by Shanghai Gold Exchange withdrawals through November 2017 has been quite robust.
The Shanghai Gold Exchange (SGE) monthly gold withdrawals topped over 189 tons (approximately 6 million ounces) in November. The SGE has been reporting significant monthly withdrawals annually since 2013. In 2015, the SGE reported a record 2,597 tons of gold had been withdrawn, an amount roughly equal to the annual global gold mining production.
Robust gold demand as measured by Shanghai Gold Exchange withdrawals has continued in 2017. November 2017’s SGE gold withdrawals of 189 tons puts total 2017 withdrawals at 1845 tons.
Monthly withdrawals on the SGE since 2013 have often topped 200 tons. The chart below illustrates the big jump in withdrawals in recent years.
In addition to a rapidly growing SGE, Chinese gold imports have also soared in recent years through Hong Kong and Shanghai. Chinese gold imports through Hong Kong peaked at 1,158 tons in 2013 and were 861 tons in 2015 and 770 tons in 2016. Through November 2017, Chinese gold imports through Hong Kong were about 560 tons. From 2004- 2008 Chinese gold imports through Hong Kong were only 339 tons.
While China has aimed for increased transparency in its gold holdings and imports, it does not yet disclose gold imports through Shanghai.
China is also the world’s largest producing nation having mined approximately 450 tons of gold a year for the past two years.
The People’s Bank of China’s Gold Reserves
In July 2015, the People’s Bank of China (PBOC) released their first update to gold reserves in six years. The PBOC reported that they had added 604 tons of gold to their 1,054 tons held in reserve, bringing their total to 1,658 tons. Since then, through July 2017, the PBOC has added approximately 185 tons of gold, bringing its total to 1,843 tons. The PBOC gold holdings place it squarely among the top gold holding nations behind only France (2,435.50 tons), Italy (2,451.80 tons), Germany (3,381 tons) and the United States (8,133.50 tons).
With an increasingly wealthy population of well over one billion, China is expected to play a greater role in gold consumption and gold pricing in the coming years.
About the Shanghai Gold Exchange
The Shanghai Gold Exchange on October 30, 2002, by the People’s Bank of China and organizes the trading of gold, silver, platinum and other precious metals.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.