China gold demand only down 3% in 2014
By Lawrence Williams
An update and complete rewrite of earlier article on China’s 2014 gold demand as recorded on the Shanghai Gold Exchange
Gold withdrawals from the Shanghai Gold Exchange (SGE) came to just under 58 tonnes for the week ending December 26th bringing the total for the year to that date to just short of the 2,100 tonnes we predicted back in November (see: China 2014 gold demand heading for 2,100 tonnes). With three trading days still to be reported on it looks as if our predicted level will be exceeded. With demand always strong in the runup to the Chinese New Year, January and early February figures are also likely to continue at a high level given the date of the Lunar New Year falls this year on February 19th, the second latest date possible in the Chinese calendar.
SGE withdrawals are seen by the Chinese as equating to that nation’s total gold demand. There is an argument that there may be a small element of double counting with respect to recycled gold, and the total figures have again been slightly muddied as they now include trade through the new international section of the SGE – the SGEI – which doesn’t necessarily move into Chinese hands, but these amounts are small at the moment and the overall figure still provides an excellent year on year comparison of true Chinese demand figures. See charts below for comparisons with prior years from Nick Laird’s excellent www.sharelynx.com and www.goldchartsrus.com websites. It shows that this year’s SGE withdrawals, due to a late surge, are getting remarkably close in total to last year’s record level and very significantly higher than in 2012 and earlier. Indeed the plots on the first chart indicate that if anything, Chinese demand in the final quarter of this year has actually been running stronger than in the same period in the record 2013 year following a substantially weaker middle section of the current year after a very strong start
Reports that India may have again overtaken China as the world’s largest gold consumer look to this observer to be a flight of fantasy……..