Gold Market Charts – December 2017

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by BullionStar, via GoldSeek:

The December issue of BullionStar’s  ‘Gold Market Charts’ looks at developments in the world’s major physical gold markets during November, the latest month for which the relevant data is available. Each month, this series of article uses gold charts from the GOLD CHARTS R US market charting website.

SGE Gold Withdrawals

Physical gold withdrawals from the vaults of the Shanghai Gold Exchange (SGE) totalled 189.1 tonnes during November 2017. These gold withdrawals are a suitable proxy for Chinese wholesale gold demand due to the fact that nearly all gold supply in the Chinese domestic gold market is traded through Shanghai’s gold bourse, and all gold for the SGE contracts has to be stored in the Exchange’s vaults.

  Shanghai Gold Exchange Gold Withdrawals (in tonnes), November 2017. Source: www.GoldChartsRUs.com
Shanghai Gold Exchange Gold Withdrawals (in tonnes), November 2017. Source: www.GoldChartsRUs.com

On a year-to-date basis for the 11 months from January to November, a total of 1845 tonnes of gold has been withdrawn from the SGE vaults, putting 2017 gold demand in China on a par with the year 2014, and ahead of 2016.

December’s gold withdrawal data from the SGE, released in January, will confirm whether 2017 was the 3rd highest ever or 4th highest ever year for Chinese wholesale gold demand.

  SGE Gold Withdrawals (in tonnes), 11 months to November, 2008 - 2017 comparisons. Source: www.GoldChartsRUs.com
SGE Gold Withdrawals (in tonnes), 11 months to November, 2008 – 2017 comparisons. Source: www.GoldChartsRUs.com

Chinese and Indian Gold Demand (CHINDIA)

The unique CHINDIA gold chart captures the strength of gold demand across the world’s two largest gold markets, India and China. The logic of the chart is that it combines net Indian gold imports (a proxy for Indian gold demand) and SGE gold withdrawals (a proxy for Chinese wholesale gold demand). A third demand source in the form of Chinese central bank gold reserves is also added, due to the fact that the Chinese central bank does not purchase gold on the SGE, meaning that Chinese central bank demand is distinct from Chinese wholesale gold demand.

  Chinese and Indian Gold (CHINDIA) to October 2017. Source:  www.GoldChartsRUs.com
Chinese and Indian Gold (CHINDIA) to October 2017. Source:  www.GoldChartsRUs.com

The latest CHINDIA chart is for October 2017 due to the fact that official Indian gold import data is released with a 2 month lag. During October 2017,  CHINDIA physical gold demand totalled 222 tonnes, which comprised 151.5 tonnes for SGE Gold Withdrawals, and net gold imports into India of approximately 70 tonnes. The gold demand component from the Chinese central bank was zero in October, because, as per every month for over a year now, the People’s Bank of China has not announced any additions to its official gold reserves.

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