Bullion Star market analyst and GATA consultant Koos Jansen reports today that the international division of the Shanghai Gold Exchange is not moving gold out of China but rather supplementing the country's gold imports. As a result, Jansen writes, withdrawals from the Shanghai Gold Exchange remain a good proxy for China's domestic gold demand, and 456 tonnes have been withdrawn this year through March 6.
If annual gold mine production is around 2,800 tonnes and monthly mine production averages 233 tonnes and weekly production averages 54 tonnes, the Shanghai figures suggest that, as Jansen's chart shows, Chinese demand is running at about 47 tonnes per week, or about 88 percent of world mine production.
Of course gold possession is not static; the metal doesn't disappear but rather is always available to the market at the right price. People and institutions throughout the world may be selling even as China may be buying. But that a single nation has started to buy so much relative to mine production suggests that inventories elsewhere are getting drawn down.
The obvious place to look for such inventories would be those central banks that purport to be major gold holders and that may be swapping and leasing gold for currency market management purposes:
http://www.gata.org/node/12016
Fortunately for those central banks, the first principle of gold market analysis by mainstream financial news organizations and financial letter writers is never to put a critical question to the biggest participants in the market even though those participants are governments that might owe some accountability to the people they govern.
That is, the mainstream offers no serious gold market analysis at all, just interpretation of the holograms that are disguised as market prices.
Jansen's report is posted at Bullion Star here:
https://www.bullionstar.com/blogs/koos-jansen...s-45t-week-9...
