SHANGHAI GOLD EXCHANGE WITHDRAWALS – WEEK ENDED SEPTEMBER 11, 2015

by Louis Cammarosano, Smaulgld Shanghai Gold Exchange Withdrawals. Shanghai Gold Exchange withdrawals were 73.69 tonnes of gold during the week ended September 11, 2015. Total gold withdrawals on the Shanghai Gold Exchange year to date are 1,828.69 tonnes. Withdrawals on the Shanghai Gold Exchange are running 37.4% higher than last year and 18.3% higher than 2013’s record withdrawals. Hong Kong gold kilobar withdrawals pass 500 tonnes in 2015.

Shanghai Gold Exchange

The Shanghai Gold Exchange (SGE) delivered 73.69 tonnes of gold during the week ended September 11,2015. During prior three day trading week ended September 11 due to V-J holidays, the SGE delivered 36.8 tonnes of gold.

The two week total of withdrawals is 110.49 tonnes of gold and the year to date total is 1,829 tonnes, for an annualized run rate of approximately 2,650 tonnes.

Shanghai Gold Exchange vs. Global Mining Production

Total global gold mining production in 2014 was 2,608* tonnes. The volume of gold withdrawn on the Shanghai Gold Exchange this year is pacing to be about 2,650 tonnes or roughly equivalent to the total global mining production of last year. This leaves little or no mining supply to satisfy global gold demand in the rest of the world.

Shanghai Gold Exchange Withdrawals vs. Comex Deliveries

In we noted “Silver and Gold Short and Long Positions on Comex

Comex is a place where banks trade gold and silver they don’t have to banks who buy gold and silver they don’t want.

These following two charts illustrate the point:

Two Week Withdrawals on the Shanghai Gold Exchange in August 2015 vs. Comex 2014

We chose the last two weeks in August as a representive sample because the the week ended September 4, 2015 was a shortened three day trading week due to V-J holidays in China.

Shanghai Gold exchange withdrawals vs Comex deliveries chart

Withdrawals on the Shanghai Gold Exchange were 132 tons during the two week period ended August 28, 2015 compared to just 85 tons delivered in all of 2014 on Comex.

Shangahai Gold Exchange Withdrawals vs Comex Deliveries of Gold 2008-2015

Comex deliveries vs. shanghai gold exchange withdrawals 2008-2015

The chart illustrates that paper market vs. physical market natures of the Comex and Shanghai Gold Exchanges.

Volume of Gold Withdrawals on the Shanghai Gold Exchange

Shanghai Gold Withdrawals week ended September 11, 2015 since 2009 chart

Shanghai Gold Exchange Withdrawals for the week ended September 11, 2015, were over 73 tonnes.

The volume of withdrawals of gold on the Shanghai Gold Exchange as of September 4, 2015, is running 37.4% higher than 2014 during the same period and 18.3% higher than 2013’s record pace.

chart showing Shanghai gold exchange withdrawals compared on week by week basis through week 35

Withdrawals of gold as of September 11, 2015, on the Shanghai Gold Exchange are running 37% higher than last year and 18% higher than the record pace set in 2013.

China is becoming the center of the Asian gold world. A $16 billion China Gold Fund was announced in May and the Shanghai Gold Exchange continues to establish itself as viable competitor to the gold trading centers in London and Chicago. China’s gold imports, trading and mining production are one of the cornerstones of China’s de-dollarization/Yuan strengthening initiatives that focuses no so much on selling U.S. Treasuries but creating alternative financial systems like the Asian Infrastrucure Investment Bank.

China is widely believed to be making a play for inclusion in the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs) Program later this year. If China fails to gain inclusion in the SDR, its recent initiatives to strengthen its currency and gain greater acceptance of the Yuan may provide a strong alternative to the IMF regime.

China Updates its Gold Holdings

China recently announced their first update to their official gold holdings since 2009. The People’s Bank of China announced that their gold holdings had climbed from 1054 tons to 1658 tons, making China the fifth largest gold holding nation in the world.
China chose to incude six years worth of gold accumulation (over 600 tons) all in the month of June.

Last month China reported that they added 19.3 tons (610,000 ounces) of gold to their reserves in July bringing their total to 1,677 tons (53.93 million ounces). Earlier this month the PBOC updated their August gold reserves, indicating that they had added 16 tonnes of gold to their reserves, bringing their total to over 1693 tonnes.

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Chinese gold reserves grew by 16 tonnes in August.

Top 20 largest gold holding nations in the world

China’s recent update to its gold holdings put it in fifth place among gold holding nations.

Many suspect that China has far more gold than they have reported.

Click here for an explanation on where China’s gold might be.

How does all that gold get to China?

The Bank of China also recently joined the auction process at the London Bullion Market Association where the price of gold is determined.

In addition, the new Chicago Merchatile Exchange futures contract for Hong Kong Kilobars has experienced withdrawls of nearly five tons of gold a day since it began in mid March earlier this year. As of September 9, 2015, nearly 500 tonnes of gold have been withdrawn pursuant to this program since March 2015 for an annualized run rate over 1,200 tonnes of gold a year.

COMEX Hong Kong Gold Kilobar Withdrawals Through September 16, 2015

comex kilo bars september 15 2015 chart

Comex Hong Kong gold kilo bar withdrawals have passed 500 tonnes since March 2015 and were their highest of the year on September 9, 2015 at over 19 tonnes.

The Bank of China also recently joined the auction process at the London Bullion Market Association where the price of gold is determined.

China is the world’s largest gold producer:

Chinese mining production chart

China is the world’s largest gold producer with mining production over 2,000 tons the past five years. China has mined 228.7 tons of gold during the first six month of 2015.

In addition to the vibrant Shanghai Gold Exchange and increasing world leading gold mining production, China is also the world’s largest gold importer. Here is a chart showing the volumes of gold traded on the Shanghai Gold Exchange vs. gold imported through Hong Kong as of April 2015.

Chinese gold imports through Hong Kong

China imports large amounts of gold through Hong Kong.

China also imports unreported amounts of gold through Shanghai.

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All charts, other than those labeled “Smaulgld, courtesy of Nick Laird.

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