LBMA Forum Singapore: SGE Chairman Confirms Chinese Gold Demand In 2013 Hit 2000 MT
By GCRU Gold News on Thursday, June 26 2014, 00:36 - Permalink
Mr. Xu started his speech by referring to the official figure of demand for the Chinese gold market 1189 tons, as published by WGC, but mentioned twice that the figure for consumption is likely higher. Later in the speech Mr. Xu mentioned and I quote the official translation in the headphones “..as the Chinese consumption demand of gold hit 2000 tons in 2013”. There you have it. The chairman himself said it out straight.
Other key takeaways from the Chairman’s speech: - The government and the government agencies are strongly supporting the gold market development in China generally and the Shanghai free trade zone specifically. - There’s a London fix for gold, there should also be a fix in China. - The free trade zone will open up the Chinese gold market internationally. Settlement will be in RMB but with the possibility to freely exchange to other currencies.
Mr Zhou also interestingly mentioned that ICBC “can not meet the demand of the market” and that we will see “the price of derivatives delinking from the (physical) spot price”. He said that fluctuations will affect the pricing system in gold but that the market will retreat to the fundamental analysis of gold supply and demand to rebuild the current market structure (my comment: obviously hinting that the physical Chinese market will take over the current derivative markets flawed price setting mechanism). He was talking about the shift of trading distribution and price transmission mechanism in the light of this.