Our fund subscribes to a specialized gold market report published by John Brimelow (JB’s Gold Jottings). He covers in-depth data on a thrice-daily basis from all of the major gold trading regions of the world. In the past 4-5 months, both deliveries and withdrawals from the Shanghai Gold Exchange have increased roughly 20% per day vs. the historical levels.
For the record, the Chinese Government requires that all of the gold that is distributed and purchased by end users in China must pass through the Shanghai Gold Exchange – except any gold purchase by the Peoples Bank of China (China’s Central Bank). In other words, if deliveries and withdrawals to and from the SGE have increased like this over the past half year, it means that China’s demand for physically delivered gold – as opposed to the fraudulent paper gold preferred by west (GLD, Comex futures, LMBA forwards, paper gold bank investment accounts, etc) – is accelerating.
Frank Holmes wrote an article for the Daily Reckoning wrote an article describing this dynamic: China’s Love Gold: You Ain’t Seen Nothing Yet. One can only wonder what China intends to do with all this gold…(I think I know).