The Shanghai Gold Exchange Reports Robust Gold Withdrawals in October.
Last week, the Shanghai Gold Exchange (SGE) released its monthly gold withdrawal numbers, showing that over 153 tons (approximately 4.9 million ounces) of gold had been withdrawn from the exchange in October. The SGE has been reporting significant monthly withdrawals over 2,000 tons 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 In 2015, the SGE reported a record 2,597 tons of gold had been withdrawn, an amount roughly equal to the annual global gold mining production.
October 2016’s SGE gold withdrawals were about 13% lower than October 2015 withdrawals and about 10% less than September’s withdrawals.
China’s Golden Appetite
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 October 2016, 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).
In addition to a rapidly growing SGE, and swelling PBOC gold reserves, 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. Through October 2016, Chinese gold imports through Hong Kong were 608 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.
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.