Gold Is DONE! The Chinese Have Stopped Acquiring Physical Gold!!

WOW! The past couple of months the Chinese have really slowed down their acquisitions of physical gold. This slow down is, of course, being blamed on the Wuhan bat-flu stew – coronavirus / Wuhan-coronavirus / covid-19 / SARS-2 or whatever it’s being called this week. April and May 2020, the latest months of reporting, have shown a drop in imports versus exports of physical gold through Hong Kong. What began in April has not happened since 2011 according to reports. Nine years of steady acquisitions by mainland China has just hit, hopefully, a bump in the road.

The Chinese mainland’s net gold imports via Hong Kong in May continued to fall short of its exports for a second consecutive month, official data showed on Monday.

The net gold imports via Hong Kong registered minus 1.5 tons in May, following minus 10.3 tons in April, Reuters reported, citing statistics from the Hong Kong Census and Statistics Department. It was the first time the Chinese mainland has become a net exporter of gold via Hong Kong in April since 2011, the report said.

The total gold imports via Hong Kong in May decreased to about 2.33 tons from 4.21 tons in April.

It is obvious that consumers’ demand for gold has declined due to the coronavirus, and the current pace of consumption recovery is pretty slow, Liu Xuezhi, a macroeconomics expert from Bank of Communications, told the Global Times on Monday.

As a key safe haven asset, trading of gold has been greatly impacted by financial market fluctuations, Liu noted, adding that amid a sluggish global economy, the fluctuation risks of US dollars may increase.

“The major part of China’s foreign exchange reserves is US dollars. In order to diversify the domestic foreign exchange reserves, China may in future buy more gold due to the metal’s high value,” he added.

China also imports gold via Shanghai and Beijing. According to China’s central bank, the value of the country’s gold reserves reached $108.29 billion by the end of May. Source

It appears the worst of it was in April with a massive 10.3 ton deficit and then May, in comparison, showing signs of getting back on track. The June report will be interesting to see and we can hope that it shows a complete reversal from April and May. I would count June as a victory if the import/exports are flat or slightly negative, less than a .5 tons, for the month. If it continues moving south, then there would be cause for concern with the worlds largest gold consumer. This would be fuel for the criminals to play games in their rigged casinos called markets.