BullionStar’s monthly ‘Gold Market Charts’ articles examine recent developments in the world’s largest physical gold markets using graphical gold charts created by the GOLD CHARTS R US market chart website. The physical gold markets covered include India, China, Russia and Switzerland and where relevant, the COMEX gold futures vault inventories.
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SGE Gold Withdrawals
Physical gold withdrawals from the vaults of the Shanghai Gold Exchange (SGE) during October 2017 reached 151.54 tonnes. SGE gold withdrawals are a suitable proxy for Chinese wholesale gold demand due to the fact that nearly all gold supply in the Chinese gold market makes its way through the SGE vaulting network to be traded on the SGE’s gold trading platform.
For the 10 months from January to October 2017 inclusive, cumulative gold withdrawals from the SGE have now reached 1656 tonnes. On an annualised basis, this would be 1987 tonnes, and would be the third highest year of SGE gold withdrawal activity on record.
Chinese and Indian Gold Demand (CHINDIA)
The regularly featured chart below of combined Chinese and Indian gold demand captures a gold demand estimate from the world’s two largest gold consuming nations. The methodology of the chart data takes the latest month’s SGE gold withdrawals as a proxy for Chinese wholesale gold demand, and to this figure adds total reported gold holdings of the Chinese central bank. This is because the People’s Bank of China sources gold from other supplies sources independent of the SGE. Since India sources nearly all of its gold demand from abroad, net gold imports (imports – exports) into India are used as a proxy for total Indian gold demand.
For the month of September, CHINDIA gold demand is estimated to have been 253.1 tonnes. This comprised 214.24 tonnes of Chinese wholesale gold demand (SGE gold withdrawals), and 38.8 tonnes from net official gold imports into India.
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