Tag - China

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Tuesday, November 14 2017

China Gold Import Jan-Sep 797t. Who’s Supplying?

Until new evidence shows up my best guess is that China net imported 777 tonnes in the first nine months of 2017, sourced from all corners of the world: the UK, South-Africa, Australia, Switzerland, the US, Middle-East and Philippines. It seems Chinese banks are active all over the world looking to buy gold on the dips. Snapping up physical metal when the time is right.

Chinese imports add to China’s domestic mining output. The China Gold Association disclosed on November 1 that mine production accounted for 313 tonnes, down 10 % compared to last year. Nearly all this gold (313 + 777) is sold through the SGE. Withdrawals from the vaults of the SGE accounted for 1,505 tonnes over this period, implying 415 tonnes (1,505 – 313 – 777) was supplied by scrap and disinvestment (or partially recycled through the SGE system).

Since all non-monetary gold imported and mine production ends up in the private sector, my estimate for total gold owned by the Chinese people now stands at 16,575 tonnes. Added by a more speculative estimate of 4,000 tonnes held by the PBOC makes 20,575 tonnes.

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Thursday, November 2 2017

Chinese gold demand up over 15% YTD

According to the Association consumption of gold bars went up 44.45% to 222.07 tonnes, while that for gold jewellery rose 7.44% to 503.87 tonnes with total consumption up 15.49% to 815.89 tonnes suggesting an annual total of well above 1,000 tonnes given demand tends to pick up ahead of The Chinese New Year.

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Tuesday, October 31 2017

Petro-yuan: China wants to dethrone dollar, RMB-denominated oil contracts

China is the world's top oil importer, and so Beijing sees it as only logical that its own currency should price the global economy's most important commodity. But beyond that, moving away from the dollar is a strategic priority for countries like China and Russia. Both aim to ultimately reduce their dependency on the greenback, limiting their exposure to U.S. currency risk and the politics of American sanctions regimes.

The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous.

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Monday, October 16 2017

Shanghai Gold Exchange gives a fillip to China’s global aspirations

Positioning itself for global pricing, the exchange aims to find price discovery among its members, local or foreign, who are either buying or selling physical gold.

As SGE is primarily a physical market, it suggests that its pricing will represent a true balance of supply and demand, industry observers said.

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Saturday, October 14 2017

China Launches Yuan-Ruble Payment System

At the time, Vladimir Shapovalov, a senior official at the Russian central bank, said the two central banks were drafting a memorandum of understanding to solve technical issues around China’s gold imports from Russia, and that details would be released soon, to which we said that If Russia - the world's fourth largest gold producer after China, Japan and the US - is indeed set to become a major supplier of gold to China, the probability of a scenario hinted by many over the years, namely that Beijing is preparing to eventually unroll a gold-backed currency, increases by orders of magnitude.

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Wednesday, October 4 2017

China proven gold reserves at 12,100 tonnes at end-2016

China’s proven gold reserves reached 12,100 tonnes at the end of 2016, the state news agency Xinhua reported on Monday quoting an official with the national gold association.

China has been the world’s biggest gold producer for 10 years and the largest consumer of the metal for four years, it said. China aims to increase its annual gold output to 500 tonnes by 2020 from around 450 tonnes currently, it said.

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Friday, September 22 2017

My Views Regarding Prospects for Gold

The Chinese have announced that they have perfected a scheme, to be launched formally in the market by the end of the year, by means of which exporters of oil to China will accept the Chinese currency, the Yuan, in payment for the oil; for this deal, the Chinese have added an incentive: the Yuan received by the oil exporters will be exchangeable for gold. This gold will be "sourced" i.e. "purchased" outside of China, for the oil exporters.

Thus, the oil exporters' Yuan will be offered in payment to the so-called "Bullion Banks" in London, who will provide the gold in exchange for Yuan.

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Sunday, August 13 2017

The Mechanics Of The Chinese Domestic Gold Market

The Chinese gold market is the world’s largest physical gold market. It is also one of the world’s most protected gold markets given that the importation of gold into China is still strictly controlled by the Chinese authorities, and the exportation of gold out of China is generally prohibited.

Hence, the market is often referred to as the Chinese ‘domestic’ gold market since gold flows and gold trading in the market are predominantly domestic in nature. Despite these trade restrictions, China still manages to be the largest importer of gold in the world. Furthermore, the Chinese gold mining sector is also the largest producer of gold in the world.

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Sunday, July 30 2017

China's first-half gold output falls, consumption up

China's gold output fell by 9.85 per cent from a year ago to 206.542 tonnes in the first half of 2017, state media said on Friday, citing data from the China Gold Association.

The country's consumption, however, was up by 9.89 per cent to 545.23 tonnes over the same period, said the People's Daily, leading to higher imports by the world's top gold consumer as indicated by data out of Hong Kong on Thursday.

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Estimated Chinese Gold Reserves Surpass 20,000t

My best estimate as of June 2017 with respect to total above ground gold reserves within the Chinese domestic market is 20,193 tonnes. The majority of these reserves are held by the citizenry, an estimated 16,193 tonnes; the residual 4,000 tonnes, which is a speculative yet conservative estimate, is held by the Chinese central bank the People’s Bank of China.

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Tuesday, June 6 2017

China's Gold Imports Seen Jumping 50% as Haven Demand Booms

Mainland China is set to import about 1,000 metric tons from the territory in 2017, said Haywood Cheung, president of the century-old exchange in Hong Kong which trades physical gold and silver. That compares with net purchases of 647 tons last year and would be the biggest since 2013, data from the Hong Kong Census and Statistics Department compiled by Bloomberg show.

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Thursday, May 18 2017

An update on SGE Vault Withdrawals and SGE Price Premiums

Year-to-date, which now includes the first four months of 2017, SGE gold withdrawals have reached 727 tonnes, which annualized equals 2181 tonnes, and would make 2017 the 3rd highest SGE vault withdrawal year on record, and only slightly behind the 2197 tonnes of registered withdrawals from the Exchange’s vaults in 2013. And since SGE gold withdrawals are a suitable proxy for wholesale Chinese gold demand, it would point to 2017 shaping up to be one of the strongest years ever for physical gold demand in the Chinese gold market.

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Friday, May 12 2017

SGE Trading Volumes surged by 43% in 2016 led by OTC and Deferred Trading

The growing influence of the Shanghai Gold Exchange (SGE), the world’s largest physical gold exchange, is a topic familiar to many. So it is not surprising that trading volumes at the SGE continued their dramatic rise in 2016, with a record 24,338 tonnes of gold traded across physical delivery and deferred settlement contracts.

Volumes in 2016 were a staggering 43% higher vis-a-vis the 17,033 tonnes traded on the SGE during 2015, which itself was a strong year, since 2015 volumes were 84% higher than the 9,243 tonnes of gold traded at the Exchange in 2014.

Therefore, in the space of three calendar years, the SGE has seen total trading volumes nearly triple, which is quite an achievement by any standard.

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Saturday, April 8 2017

Higher prices dent gold demand in Asia; China premiums rise

In top consumer China, premiums were around $10 to $12 per ounce against the international benchmark, up from last week's to $8 to $10.

Premiums in China had risen early this month as traders said supplies of the precious metal were limited due to tightening import restrictions to stem currency outflows.

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Wednesday, March 29 2017

Russia, China Lay Groundwork For BRICS Transactions in Gold

Recent progress made in streamlining trade in local currencies has brought Moscow and Beijing closer to creating a financial architecture that could facilitate transactions in gold.

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Saturday, March 18 2017

China gold premiums rise on limited supply

Gold premiums rose in China this week as traders said supply of the precious metal was limited due to tightening import restrictions to stem currency outflows.

Premiums climbed to over $20 an ounce against the international benchmark from $15-$17 last week.

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Tuesday, March 14 2017

Solving the Secret Behind the Chinese Gold Market

China, it seems, wants to make the rules in the international monetary system, which is why it has been acquiring vast amounts of gold through both private and official channels.

Because of the obscure nature of the Chinese gold market and the reluctance of Chinese officials to show their hand, nobody has been able to accurately calculate how much gold the Chinese have acquired since 2000, when they began amassing it.

Enter Koos Jansen, an analyst with Singapore bullion dealer BullionStar. He has studied the Chinese gold market for years and recently came up with an estimate of total Chinese gold holdings: 19,500 metric tons, or 21,495 U.S. tons, at the end of January 2017.

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Wednesday, March 8 2017

Midas touch: China's tech, financial firms eye virtual gold rush

China's virtual gifting market, typically the domain of plugged-in young consumers celebrating special occasions or flirting, is luring major financial institutions keen to boost trade of another auspicious commodity: gold.

Tencent's digital gold packets, known as "microgold", are backed by the country's biggest bank, Industrial and Commercial Bank of China (ICBC) (601398.SS). They allow users to send funds that track the real-time value of gold to friends over the firm's popular messaging platform WeChat.

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Tuesday, February 28 2017

China to boost gold output by 2020

China will increase its annual gold output to 500 tonnes by 2020 from around 450 tonnes currently, according to the Ministry of Industry and Information Technology (MIIT).

China has been the world's biggest gold producer for 10 years and the largest gold consumer for four years.

The country's gold output rose 0.76 percent year on year to 453.5 tonnes in 2016, with consumption hitting 975.4 tonnes.

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Monday, February 27 2017

Online channels shine with gold-backed financial products

Sellers of gold-backed financial products are expanding their online sales channels and attracting more investors to the precious metal as a hedging tool and asset safe haven, analysts have said.

More than 20 internet-based service providers have launched gold-backed financial management products so far, including Tencent Holdings Ltd, which started enabling users to give digital red packets of physical-gold-backed assets that can be transacted in real time.

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