Shanghai Gold Exchange Withdrawals Point to Strong Chinese Demand

Mineweb’s Lawrence Williams said in an article published Sunday that although rumor has it that India has overtaken China as the world’s largest gold consumer once again, withdrawals of the metal from the Shanghai Gold Exchange (SGE) “continue to contradict this enormously.”

Williams states:

The Chinese themselves have stated that SGE withdrawals – all physical gold which, under SGE rules, cannot be returned to the Exchange for resale – are totally representative of Chinese gold demand.  So the SGE figures, which are published weekly, in our view remain as the most readily available measure of true Chinese gold demand.  As SGE figures nowadays include withdrawals from the Exchange’s international section, the SGEI, (which are not necessarily landed in China at all) the actual Chinese mainland demand figure may be a little lower than the overall total may suggest, but the SGEI withdrawals are believed to be a very small maximum of up to 5 tonnes, probably less), so the latest overall SGE withdrawals, which are running at a huge level, indicate massive internal demand running up to this year’s Chinese New Year, which is still nearly 3 weeks away (on February 19th).

Click here for the full Mineweb report.