Chinese gold demand continues to rise Year-Over-Year
Chinese gold demand continues to rise Year-Over-Year by Lawrie Williams – Sharps Pixley
China’s Shanghai Gold Exchange, through which all gold demand transactions pass. Has just announced its gold withdrawal figures for May, and they continue to show a rising demand trend over figures released at this time in 2016 and 2017. May withdrawals this year, for example, were 9% up on the May 2017 withdrawal figure and the cumulative total year to date is also 8.6% on a year ago when full year withdrawals amounted to 2,030.48 tonnes. A continuation of the current trend would put this year’s total at around 2,200 tonnes or higher – the largest annual withdrawal figure since the record 2015 year when SGE withdrawals totalled just short of 2,600 tonnes.
As we have noted before there are contentious views on whether SGE gold withdrawals truly represent Chinese gold demand as they suggest figures far in excess of the Chinese gold consumption data estimated by the major precious metals analytical consultancies. However they are much more in line with known Chinese gold imports, plus China’s own gold production, plus an allowance for scrap recycling. China precious metals watcher Koos Jansen avers that SGE withdrawals are equal to real Chinese demand and cites figures in the China Gold Yearbook, which equate SGE gold withdrawals to true Chinese demand to support his viewpoint.
Table: SGE Monthly Gold Withdrawals (Tonnes)
|Month||2018||2017||2016||% change 2017-2018||% change 2016-2018|
|Year to date||899.65||828.76||834.60||+ 8.55%||+7.79%|
Source: Shanghai Gold Exchange. Lawrieongold.com
Whatever the truth of the matter, the fact that SGE gold withdrawals equate much more closely to known gold imports to the Chinese mainland from countries which detail their export statistics like Switzerland, the U.K., the U.S., Australia etc. plus gold flows from Hong Kong, suggests that the SGE figures are at worst a great guide o overall Chinese gold demand.