– China officially imported over 1,500 tons in 2013 with some estimates as high as 2,200 tons. This is in addition to the 400 tons they produce annually which is never leaving the Mainland.
– China has now declared that its citizens are privately holding more than 6,000 tons of Gold turning China into the “Gold Consumption Super-Power”
– China will not release their Gold holdings as they want gold prices
to stay low. Acquiring gold is all part of China’s master plan which the
Chinese press refer to as “Secret Gold Holding Logic” to make Shanghai
the world’s financial centre with the RMB as its central currency.
As most informed individuals know, Gold has been dropping like a rock from
its previous highs of over $1900 an ounce. This has only encouraged more
buying from China, in paticular the fictional character called “Auntie Want”
which represents all of those middle-aged Chinese women with money to burn
that love buying real assets like houses and are gold are now being blamed
for buying over 200 tons in only a few months during the summer when prices
hit lows around $1,250.
Last year, in 2013, China took advantage of falling prices to import more
than $1,500 tons of Gold. This is in addition to the 400 tons they produce
annually which is never leaving the Mainland.
What has people really talking in China is why the government will not
release their holdings in the People’s Bank of China (PBoC).The last time
China released their official holdings was 2009 when they shocked the markets
by showing a massive increase in reserves to 1,054 tons. They have always
promised to release their official holdings numbers every five years. Those
of us that watch China and Gold closely have seen the PBoC’s Gold release
data dates come and go with no release of the banks holdings.
Chinese financial commentators are saying that this is because the PBoC would
spook markets showing that their holdings are now up near 5,000 tons.
This is the last thing the PBoC wants to do as they plan to buy more and
they want to buy as low as possible.
The Shanghai Gold Exchange is now the world’s largest physical bullion
market in the world and all part of the plan. They are set up in Shanghai’s
free trade zone and are opening up gold holdings to foreign investors who
want to keep bullion in China. The Gold contracts are of course priced in
Chinese Yuan. Shanghai has also recently opened a new vault with a
2,000 tons capacity to back up Shanghai’s bid to hold and control global
pricing of the commodity.
While traders in Chicago on the COMEX sit and trade each other paper
contracts all day with neither one actually owning any of the commodity
they are training, the traders in Shanghai will be well-at-ease to know
the physical bullion is actually there.
China’s continuing grip on the global gold market is all part of the plan
according to analysts in the Chinese media. Literally translated it is called
the “Secret Gold Holding Logic”. China needs Shanghai to become a global
financial center. It will surly become one as the RMB goes global, and China
will have the gold reserves to partially back the RMB with a hard asset.
This is the long term plan according to some state media sources in China.
There are some Gold holdings in China which are not secret. Recent numbers have
been released estimating that the Chinese population themselves are now holding
over 6,000 tons of Gold. China has long been trying to get its citizens to invest
in Gold. In fact going back to 2004, the PBoC governor, Zhou Xiaochuan, was nicknamed
“Golds best salesman in the media. The result is today, in China’s Big 5 banks you
can hold gold accounts both paper and physical as well as visiting their “GOLD VIP”
centres to purchase physical bars.
With China now importing more than 1,500 tons annually and the consumers holding
more than 6,0000 tons one commentator in the financial press refereed to China has
the “New Gold Consumption Super-Power”