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China Gives Thanks For Cheap Gold

by John Rubino on November 28, 2013 · 32 comments

Just a quick Thanksgiving morning update on China’s gold imports, which continued at extraordinary levels in October. To put the 131 tonnes in perspective:

  • Until recently there was an agreement in place that limited European central bank gold sales to 400 tonnes per year, because any more than that was seen as disruptive. Now China buys that much in a single quarter.
  • The world’s gold mines outside of China produced about 200 tonnes in October, which means China alone bought 65% of global gold production.
  • Since the beginning of 2012, China has imported over 2,000 tonnes of gold, an amount equal to about 2/3 of the official reserves of Germany.
  • China’s domestic gold mines produce around 300 tonnes a year, all of which stays in-country. So China’s total reported gold accumulation is 2,500 tonnes in just the past 22 months. And that does not include gold entering the country from other ports, which could be considerable.

China gold imports Oct 2013 final version

  • R.A. Brown

    China: They’re number one! They’re number one!

    • fallingman

      Funny R.A. Brown.

      And kinda sad at the same time.

      • Bill Johns

        Yeah, I agree, funny and sad. Funny in that a communist country understands precious metals, and sad because we so casually gave away an empire to central banksters. When all the dust settles and central banks around the world are dismembered, the one with the gold wins.
        Bill

        • sculptor bill

          bill, USA is sooooooo very much more socialist than China. There is a roaring capitalist movement in all levels of business. There is also an almost Dickensian level to the cruel realities that occur, ie. if you are sick and in need of oxygen in the hospital, YOU WILL NOT GET IT if you don’t have the $10 to pay for it, you will die on a cot in the hall due to lack of capitol. That never occurs in socialist state such as USA.

          The difference in China is that within living memory 25 – 30 million people died of starvation in the 60′s and within memory there have been several currencies that have become worthless, property and land have been seized by government and rich oligarchs a like….whereas hoarded gold and silver and jade has gotten you through in hard times. All the surrounding Asian states like Vietnam, India etc have populations that prize gold as the ultimate survival core of wealth-holding.

          I don’t think Central banks will be dismembered, they will be holding Gold as their core holding of wealth to rebuild the shambles, as they allways have.

          gold and silver maybe outlawed as may be cash… and all transactions may be required to be made by card to track and tax, but outside thesystem will grow a vibrant economy that uses “pirate money” ie silver and gold.

          Hold Fast!

      • R.A. Brown

        Exactly, fallingman. Exactly.

  • Jim Pa

    This is what I believe is happening. Sell as much paper gold and silver as possible to drive down the price, and acquire as much physical gold as possible at the same time. This is more than one institutions strategy I believe. China is one, Russia another, and who knows how many more out there are doing this. We all know the gold price is driven by derivatives. If i was a big player, and saw what is going on in the world today, wouldn’t it make sense to do just that? You can see it in bitcoin and in art sales which are going parabolic, but are not cared about by the central banks. They do care about gold however, and that’s why we’re seeing what we are. By low, sell high…if you sell at all.
    The end game is to trade gold for other assets when the time is right, but we sure don’t have to worry about that right now.

    • pipefit9

      I guess I just don’t understand the ‘bitcoin’ love affair, except in terms of trend following. After the big reset (2014?), I suspect bitcoins will sell for their intrinsic value, zero.

      So will gold, which is about equal to about one days wages per gram. This is an estimate. It is my understanding that in countries where a lot of placer gold is still being mined the old fashioned way, a highly experienced worker can sluice out a gram in a very good day.

      • Wim Lammens

        Do some decent research and conclusions will be different

        • pipefit9

          wikipedia-”…called “miners” because they are awarded in bitcoin when they are first to solve such puzzles—mining is how new bitcoins are generated.”

          Bitcoins are awarded as prizes to those that solve puzzles, and you are a court jester, lol.

  • Silverbug

    Told a friend the other day who now works for The Peanut Shoppe who is owned by Smithfiled Foods,who is now owned by a Chinese consortium,that he now works for China. So when someone says to me if you like China so much move there. Why? Their here lol!

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  • esqualido

    “Since the beginning of 2012, China has imported over 2,000 tonnes of gold, an amount equal to about 2/3 of the official reserves of Germany.” (there’s reserves and then there’s if-we-could-only-get-our-hands-on-reserves)

    • Antiehypocrite

      Germany has no reserves – because they have asked for them back and the US has refused – because they have no gold either

      • R.A. Brown

        Actually, they told Germany it would take seven years to repatriate their gold. They DID get some for shipment but a small fraction of what they own.

        The U.S. having no gold and most of the population having no gold is going to be UGLY when it all comes crashing down.

        • pipefit9

          Actually, RA, Germany asked the USA for only 300 tonnes, out of a total of about 1526 tonnes of German gold supposedly stored in America. So it is even more dire than even your bleak assessment.

          • windslice

            Was there ever a reason given for the seven year delay?

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  • dassa0069

    GOLD IS MONEY YOU CAN TRUST.

  • Bruce Calder

    As an American/Westerner, what makes me so mad/sad is how stupid “everyone” is. Everyone now thinks gold is a useless relic, or a useless commodity, or a risky and volatile investment, or an archaic form of money, or the “holy grail” of extremists and anarchists and fools, but I think that’s only because the Fed (the central bank of the US) and politicians/media dis it, which is pathetic. But as soon as some other country like China announces that gold is “golden” and that they have the most of it, everyone is going to suddenly respect it (again).

    I’m thankful for a lot, including this website and the opportunity to express my views however futile they may be.

    Happy Thanksgiving.

    • whateverdude

      I’m thankful people like you still exist in America who are not afraid of the NSA and continue to speak up against government idiocy despite obvious moves by the US government to track dissidents and squash freedom inside the country.

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  • Bill197511

    Our dumb shit “leaders”, in trying to support the fiat dollar by manipulating gold, are
    allowing China to buy massive levels of gold at artificially low prices. They don’t know
    the golden rule: He who has the gold makes the rules. I wonder how much gold is left
    in Fort Knox.

    • DaveZiffer

      Stop worrying. Gold is merely a barbaric relic, of no value to anyone.

      • Bill197511

        If you are serious, one day you’ll be wiping yourself with your paper money.

        • DaveZiffer

          I guess my sarcasm wasn’t obvious enough.

          • Bill197511

            Sorry for jumping on you… It’s just that these idiotic Keynesians ala Paul Krugman keep popping up. Guess I’m getting a little gun shy.

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  • Keepitsimple

    Diversification of an investment portfolio is number one in
    security. There is a chance that China maybe getting too top heavy in gold.
    What if the West trumped China’s card and found a way to discredit gold as “the
    medium” of global wealth. I don’t know what a new wealth might be but the
    possibilities are there. Don’t get me wrong, I love gold.

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  • Ziad K Abdelnour

    Would you rather have gold or dollars? People around the
    world are asking this question more and more as we enter
    the year 2012. In fact, Donald Trump already accepts gold
    as a form of payment from tenants in one of his buildings
    because Trump believes the U.S. Dollar is losing its value
    and its status as a credible international reserve currency.

    Ziad K Abdelnour


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