Waning Chinese Gold Demand

After headlines of softer jewellery gold demand in July for China and slower Hong Kong imports (because they can now officially bring straight into Beijing ‘quietly’) the graph below puts it back into perspective.  Respected analyst Koos Jansen digs into the Shanghai Gold Exchange (SGE) more than most and says this in regard to the graph below:

“Using SGE withdrawals as a reference, China mainland has net imported 670.7 tonnes year to date. Based on net imports, Chinese mining, a jewellery base of 2,500 tonnes in 1995 and guessing how much the PBOC has accumulated since 2009, total estimated Chinese gold reserves stand at 14,901 tonnes as of July 25.”

If you are wondering about the “guess” bit, the Peoples Bank of China has not told the world how much gold it holds in reserves since 2009 when it revealed 1054t, a relatively small amount at 2% of foreign reserves.  Since then they, as a country, have been rampant buyers and producers, now the biggest in both.  What we don’t know for sure is how much the government has kept.  Koos estimates around 4000t (and there are others estimating well above that), which the Chinese know that if officially confirmed would send shockwaves around the world and end their wonderful run of buying up cheap.

On any account this is not a graph showing any material signs of waning demand.