Correction to total SGE withdrawals for August – these had previously been overstated

With recorded deliveries of just under 60 tonnes in the final week of August, the Shanghai Gold Exchange statistics would seem to disprove general media reports that Chinese gold demand is falling.  The week 34 figures (up to August 28th) bring SGE withdrawals for the month to a staggering 302 tonnes (with one trading day to go).  This is already a new monthly record and what is even more significant is that August is usually one of the weaker months of the year for SGE deliveries.  To put this figure into context, the world’s second largest gold producer, Australia, mined 272 tonnes of gold last year, so the SGE delivered nearly 50 tonnes more than this out of the exchange in a single month.  And don’t forget the SGE only deals in physical gold – there’s no paper gold element involved.

Year to date SGE figures show that physical gold withdrawals out of the Exchange are already running hugely ahead of those at the same time of year even in the record 2013 year for Chinese gold demand.  Indeed withdrawals are running fully 219 tonnes higher than by the end of August 2013.  With Chinese demand usually stronger in the tail end of the calendar year, particularly in November and December as the Chinese New Year – a time when domestic gold consumption normally is at its highest – approaches, it does currently look as if we will see a huge new record in the SGE figures this year.  This just doesn’t gel with the general position on Chinese demand as expressed by the media.