Despite the erroneous mainstream media reports that China’s demand for gold is trending lower, based on the withdrawal figures from the Shangai Gold Exchange, China’s demand for gold YTD is tracking at a record annual rate.
The reason that mainstream sources for gold imports into China – like the World Gold Council and GFMS/Thomson Reuters – are highly inaccurate is that they only track the amount of gold exported to Hong Kong , the numbers of which are released to the public. However, China also now imports gold through Beijing and Shanghai. Those numbers are kept secret by the Chinese Government. Thus, it is impossible to gauge Chinese import demand for gold base on the numbers published out of Hong Kong.
YTD through May 22, 945 tonnes have been withdrawn from the SGE. While the rate of deliveries to the SGE have been slowing the past two weeks, this is a function of seasonal patterns. The reason the amount of gold withdrawn from the SGE is the best barometer of demand for gold in China is that, by law, all gold bought and sold in China must be transacted through the People’s Bank of China. The PBOC uses the SGE for this purpose. However, this does not represent the total amount of annual gold demand in China because it does include any gold purchased by the PBOC, as the PBOC does not have acquire its gold from the SGE.
Mineweb.com’s Lawrence Williams wrote an article China’s YTD gold demand and the possible implications of China’s heavy accumulation of gold:
We keep seeing reports in the mainstream media suggesting that Chinese gold demand is slipping away, but continuing strong gold withdrawal figures from the Shanghai Gold Exchange (SGE) seem to contradict these reports. While, as we have reported before, there are many doubts expressed as to whether SGE withdrawals are actually equivalent to Chinese consumer demand, there is no doubt that they do represent the underlying consumption situation.
You can read the rest of this article here: China’s Gold Demand Is Holding Up Well