Guest Post: "Confirmation That PBOC Does NOT Purchase Gold Through the SGE", by Koos Jansen

Mon, Oct 6, 2014 - 12:02pm

This week's guest for our "A2A" webinar series will be Dutch metals analyst, Koos Jansen. In preparation, I urge everyone to read this extremely important, new post that Koos put out last Friday.

The original link to Koos' article can be found here: and I strongly encourage you to bookmark/favorite the BullionStar site for immediate access to all of Koos' articles.

After reading this post, I was able to draw several important conclusions:

  • The mainstream media is grossly underestimating total Chinese gold demand
  • The World Gold Council is primarily responsible for this error
  • The World Gold Council almost seems to be doing this deliberately
  • Koos' current estimate of PBOC holdings at 4,000+ mts might be too conservative

These conclusions led me to these critical questions:

  • If it was understood that total Chines holdings (PBOC + "civilian" holdings) actually exceeds 15,000 mts, what would be the market reaction?
  • And from where in the heck is all this gold coming???? China publicly states that they mine and "recycle" just 700 mts/year. From where do they source the other 1500 tonnes of "civilian" demand plus all of their PBOC demand????

Please take the time to thoroughly read this extremely important post.


"Confirmation That PBOC Does NOT Purchase Gold Through the SGE"

by, Koos Jansen of

Last week I wrote Scotiabank had released an unveiling report on Chinese gold demand, written by Na Liu of CNC Asset Management Ltd.. In the report Na stated what I've been publishing for over a year: the amount of gold withdrawn from the vaults of the Shanghai Gold Exchange equals Chinese wholesale gold demand. This report put a little smile on my face as it was another confirmation of my research (SGE chairman Xu Luode previously confirmed the relationship between withdrawals and demand, at the LBMA forum in Singapore).

Soon after, I reached out to Na asking if he would like to share some of the details of his research. He was happy to tell me what he had found during his trip to Shanghai meeting the President of the SGE Transaction Department. Additionally he told me he was perplexed by the difference between actual Chinese demand and the numbers from the World Gold Council and China Gold Association. The discrepancy was such wide it made him doubt if he wasn't missing anything. I told him I walked the same trail. I can remember when I first read the Chinese SGE weekly reports and couldn't believe the tonnage being withdrawn from the vaults. Later on, when I discovered these amounts equal wholesale demand I spent quite a few weeks thinking through all data and evidence I'd collected. How can the Wold Gold Council be so wrong?

Ok, I was 'a little' off in predicting when mainstream media would find out about actual Chinese gold demand.

I sent Na all in-depth analyzes I've written on In Gold We Trust and (I, II, III, IV, V, VI), which strengthened his understanding of the Chinese gold market even more. He was no longer hesitant to publish an additional report on the Chinese gold market, disclosing exactly what he found out in Shanghai. On September 29 The Mystery of China’s Gold Demand was released [brackets added by me for in-depth analyzes]:

The Mystery of China’s Gold Demand

Over the years, we, like most investors, track China’s gold demand by following the estimates made by the China Gold Association (CGA) and the World Gold Council (WGC). For instance, the China Gold Association said China’s total gold demand in 2013 was 1,176.4 tonnes and the World Gold Council said China’s total “consumer demand” was 1,065.8 tonnes. So, in 2013, China’s gold demand was slightly over 1,000 tonnes, we initially concluded.

This is why we were shocked by what the Shanghai Gold Exchange (SGE) told us earlier this year. Back in May, we participated in a Canadian institutional investors’ trip to China organized by Scotiabank. The Canadian delegation visited the Shanghai Gold Exchange and met with President of the SGE Transaction Department and other senior officials. The delegation was told by our Chinese host that China’s gold demand was about 2,200 tonnes in 2013, judged by the withdrawal amount from the SGE vaults.

[as I've written in SGE Withdrawals Equal Chinese Gold Demand, Part One, and Part Two

Apparently, the SGE’s estimate of Chinese demand is much higher than the estimates made by CGA and WGC. If China’s actual gold demand is over 2,000 tonnes rather than slightly over 1,000 tonnes, then the gold market could be a lot tighter than thought. As such we asked a lot of questions to the SGE executives in the meeting and when we were back, we carefully reviewed the trading mechanism of the SGE in the past few months.

After all our work, as we wrote on September 25, we are now of the view that to understand China’s real physical gold demand, investors should simply look at the weekly withdrawals from Shanghai Gold Exchange vaults (Exhibit 1). The weekly withdrawal figures provide a much more accurate data series that reflects China’s aggregate wholesale demand in a timely way. This is because for tax purposes all gold imported into China and all gold produced within China must pass through the vaults once, and only once, before reaching jewelry makers, investors, industrial users, and consumers.

We hesitated over the past few months in publishing our findings from our May meeting with the SGE as these findings are non-mainstream. Now, as we are becoming more convinced, we want to share the following comments made by the SGE executives to the Canadian delegation. 

First, the withdrawal data reflects the actual gold wholesales in China. In 2013, the total gold withdrawal from the SGE vaults amounted to 2,196.96 tonnes. The President of SGE Transaction Department (The President) said: “This 2,200 tonnes of gold, after leaving our vaults, they entered thousands of Chinese households in the form of jewelry and investment purchases.”

[as I've written in Is The World Gold Council Clueless On Chinese Gold Demand?]

Second, none of the 2,200 tonnes of gold was bought by the Chinese central bank. The President said: “The PBOC does not buy gold through the SGE.”

[as I've written in SGE Withdrawals Equal Chinese Gold Demand, Part Three and Does The PBOC Purchase Gold Through The Shanghai Gold Exchange? and Does The WGC Understand The Chinese Gold Market?]

Third, the financing deals do not exaggerate SGE’s assessment of China’s gold demand. This is because “the financing deals do not take place after the gold leaves the vaults.”

[as I've written in The Round Tripping Myth And Why It Doesn’t Hurt Chinese Gold Demand]

Fourth, in response to our question about the source of the 2,200 tonnes, he replied: “About 1,500 tonnes from imports, some 400 tonnes from domestic mine output, and the rest is recycled gold.”

[as I've reported in SGE Chairman: China Should Become First Class International Gold Market]

And last, when we asked why the China Gold Association’s number is so low, the President said: “They mainly cover the gold sales through the gold shops. This is their main source of information. And their number is quite useful in that way. However, our system has broader coverage.”

[as I've written here]

So here is our current conclusion after several months of deliberation. We think the SGE withdrawal data is a fair representation of China’s wholesale gold demand. Again, this is because for tax purposes all gold imported into China and all gold produced within China must pass through the vaults once, and only once, before reaching jewelry makers, investors, industrial users, and consumers.

Lastly, we do note that in recent weeks, the withdrawal number is getting bigger (Exhibit 1). This might indicate the de-stocking process is coming to an end. We maintain our relatively cautious “market weight” call for the gold sector from a China perspective for the time being. In the meantime, we will closely monitor the weekly withdrawal data to decide whether we should turn more positive.

Latest SGE withdrawals numbers (- Sep 26, 2014). 

Not only does this, again, confirm SGE withdrawals equal Chinese wholesale demand, additionally it confirms that the PBOC does not buy 1 gram of gold through the SGE (as I've explained in this post).

Two more important statements for me to make:

1) Because we have additional consolidation about the workings of the SGE, Chinese import and PBOC purchases, the next chart is now confirmed to be fairly accurate. China holds (including September 2014) approximately 11,224 tonnes in non-government gold reserves and officially 1,054 tonnes in reserves at the PBOC. However, from various high ranking Chinese officials we know the PBOC has been steadily accumulating gold since 2009, which make current PBOC reserves likely to be 4,000 tonnes. In total there are about 15,224 tonnes of physical gold reserves in China mainland.

(for a detailed explanation of how I conceived this chart read the last bit of this article)

2) There is now so much evidence the demand numbers from the World Gold Council are erroneous the WGC is obligated to either revise their numbers upwards, or cease reporting on the Chinese gold market all together. Until then their numbers on Chinese demand are completely unacceptable.

Koos Jansen

About the Author

turd [at] tfmetalsreport [dot] com ()


arch stanton · Oct 6, 2014 - 12:09pm

numero uno

and buying EXK again today

Spartacus Rex · Oct 6, 2014 - 12:27pm


PBOC has been busy ordering from the U.S. Mint! Haven't anyone been paying attention?smiley

Cheers, S. Rex

rl999 · Oct 6, 2014 - 12:29pm

un-federal reserve losing gold, 39Tons in 2 months and 70T ytd

New York Fed Gold Stock Tumbles 15 Tonnes In August

Could it be sie Germans?

Published: 02-10-2014 18:05

Every month the Federal Reserve bank of New York (FRBNY) publishes the amount of gold it holds in custody for 36 foreign central banks and the IMF. After a significant drop in July of 24 tonnes, 15 tonnes were withdrawn from the vaults in August. Germany is the only country, that I'm aware of, currently repatriating gold from New York. This suggest all withdrawals year to date have been shipped to Frankfurt. 

Year to date 70 tonnes of gold have left the FRBNY vaults. Germany's central bank, the BundesBank, has stated the 5 tonnes of gold they repatriated in 2013 from New York did not meet the London Good Delivery (LGD) standards of 99.5 % purity. Suggesting the repatriated bars could have been coin bars, melted from golden coins that are an alloy of gold and, for example, copper. A long long time ago when gold coins circulated in the economy as money, these coins were an alloy of gold and other metals which made them more durable. 

The coin bars can also be seen on the bar list of the gold stored in Fort Knox. The spreadsheet of that bar list can be downloaded here (click download). The fineness tells you the purity. The average purity of the 446,698 bars in Fort Knox is 92%. Meaning there are a lot of coin bars in Fort Knox.  

Germany is one of the few counties that 'recently' has published the exact whereabouts of it's sovereign gold. Click here for the list published in 2012. However, they haven't released a bar list that would expose what type/purities of bars are allocated at what storage facility.

ETA: I haven't seen this anywhere, nor heard any discussion of it around here, entirely possible that I missed it however. If my posting is the first about it, then it's certainly a new wrinkle to consider in the recent price action. Is 70 tons enough to have moved the price down ~$140 as we have seen? Doesn't explain Ag/Pt/Pd/oil, so I think not.

(repost from friday podcast thread)

ArtL · Oct 6, 2014 - 12:42pm

lots of gold into China!

no so much into US

buzlightening · Oct 6, 2014 - 12:50pm

Well, perhaps the people of china more prepared

to embrace liberty and freedom with precious metals in the hands of the people? We the people have been too long in sleepy hollow and it's leaving a majority of U.S. Citizens to be pants down; naked in the streets with any new precious metals backed reserve currency. 

buzlightening · Oct 6, 2014 - 12:50pm

Well, perhaps the people of china more prepared

to embrace liberty and freedom with precious metals in the hands of the people? We the people have been too long in sleepy hollow and it's leaving a majority of U.S. Citizens to be pants down; naked in the streets with any new precious metals backed reserve currency. 

Goldencross · Oct 6, 2014 - 12:55pm

Ask yourself this... Is it

Ask yourself this...

Is it reasonable to assume that what some folks are estimating to be the above ground supply of gold 170.000 MT is the LOGICAL TOTAL AMOUNT???

A simple som...

+/- 2.400 MT is the years mine world gold production.

So lets say 2000 years of gold mining than the total above ground supply would be 480.000 MT.


Who knows..


Motley Fool · Oct 6, 2014 - 1:15pm


Yes. Mining production hasn't been constant the last 2000 years.

goldcom · Oct 6, 2014 - 1:20pm

A better time for action

Remember TF's Time for Action post? Then we got all sidetracked on Andy Maguire and the Cohan article that should have been published years ago. Being old news, even if it did get published how much attention would it have gotten. I think doing what we can to promote the findings of Koos Jansen is a better direction of the,"time for action".

Koos has the numbers and is getting more conformation from Na that should blow the lid off the MSM reporting of low demand for gold. We either need the WGC to subject themselves to a true analysis or find a more mainstream source to confirm Koos Jansen's number or better yet both. Couple that with the known volumes of gold in the other markets in the world and your going to come up with a demand 1,000 tons or so, over mining and recycling totals. This would force the financial media to consider where those considerable volumes are coming from.

Koos Jansen was one of my favorites as reliable sources as I have always felt he lays out such a great case with the SGE so I'm biased toward him I guess. I think after more here at Turdville check Koos out more closely they will feel the same.

My question to Koos would be, who could be a trustworthy source of conformation the the financial media couldn't ignore? Not that I have to be convinced but somehow we have to get Koos front and center with the financial media crowd and that will require more conformation of his findings.

This story revealed with mainstream general acceptance blows the lid off the demand story and whole suppression scheme. It will make the investors that have listened to MSM sources realize they've been duped.

SilverSurfers · Oct 6, 2014 - 1:27pm

metals up

surprise then a nice little pop as well, hmmmm, trend change?

kudos to koos, rockin the slow boat. :)

silver2013 · Oct 6, 2014 - 1:28pm

Turd. Great job. good info.

Btw. Can we get your opinion on what Harvey Organs is stating about the comex defaulting due to Shanghai needing more gold and silver coming up by December 2014 and having a very high open interest? How do you see this playing out? Thanks

DeaconBenjamin · Oct 6, 2014 - 1:29pm
silver2013 · Oct 6, 2014 - 1:34pm

I'm not buying it

The Comex only allows an entity to take delivery of up to 1,500 contracts per contract month. So, for Harvey to be right, the Chinese would have to use about 50-100 shell "accounts" to get around the rules. This doesn't seem likely or even plausible.

Even if they did this, do you really think that the CME/Comex would allow their exchange to be busted?

At any rate, God bless Harvey. He was an original in this fight and I'm grateful for all the work he's done over the years. In this instance, though, I'm not on board.

DeaconBenjamin · Oct 6, 2014 - 1:42pm

Hilton to sell Waldorf Astoria New York to Chinese insurer

Hilton Worldwide Holdings Inc. has agreed to sell its most prestigious hotel, Manhattan’s Waldorf Astoria, for $1.95 billion to a Chinese insurance company, the hotel operator said Monday.

The sale price is among the highest ever for any hotel and represents the latest sign of intense international demand for luxury hotels and other trophy properties in major global cities. The Waldorf Astoria’s price of $1.3 million a room is also among the highest ever paid in the U.S. on a per-room basis.

The acquisition is the first major deal in the U.S. for Anbang Insurance Group Co., which beat out at least two other bidders for the property, according to a person familiar with the matter.

ForWhomTheTollBuilds TF · Oct 6, 2014 - 2:41pm

"I'm not buying it"

I too have enjoyed Harvey's efforts but am also of the mind that he is too much of an idealist for his own good in this instance. He seems to be one of these, "once they run out, the game is over" types, and while it sounds so simple I doubt it will be.

I read his site daily between last Oct and February. Perhaps I wasn't paying enough attention or I am too stupid to understand what he was saying but it looked to me like at the exact moment the Comex inventories fell to a point where they were in real danger of default (Dec, Feb), suddenly gold longs lost all interest in actually getting their gold delivered, at least according to delivery data.

I don't know what those guys did to get through that, who they bribed or threatened etc, but I have no doubt we will read all about it in years to come in the same "oh, and by the way" tone the MSM has always used to admit that yesterdays tinfoil hat theory was actually completely true.

Reading here that Scotia has now "done pioneering work to bring the truth about Chinese Gold Demand to the mainstream" has steam coming out of my ears. You think that data, widely available among readers of Turds and Jackasses could have stemmed the decline a bit last year if it were "mainstream enough to be credible"?

In the end I put the blame on the average citizen for being too lazy to demand better.

tyberious · Oct 6, 2014 - 2:44pm

Instead of Puking, Do This

 The Biggest Disconnect

While all precious metals have dropped, the silver price has suffered the most.

As a monetary metal, it seems to defy logic that silver has plummeted while debt levels have soared, money printing is at historic levels, and fiscal deficits remain stubbornly high in spite of record federal tax revenue.

But the disconnect is bigger than just the price vs. silver’s monetary role. Consider the following aspects of the silver market that are rising:

  • Global electronics demand;
  • Global jewelry demand, especially in Asian countries;
  • Total industrial demand (now expected to grow 5% per year through 2016 and outpace global GDP growth);
  • The number of new industrial applications;
  • The number of new biomedical uses;
  • Photovoltaic (solar) demand;
  • Volume on the Shanghai Futures Exchange (which already surpassed the Comex last year);
  • US Mint sales YTD: silver Eagle sales in September were double July and August; it sold 766,000 Eagles on the last day of the month alone;
  • Perth Mint sales: they were 41.6% higher in August than July, and September sales were the third highest of the year;
  • The likelihood of a supply deficit this year (based on CPM Group estimates);
  • Domestic demand in China, which is expected for the first time in history to exceed 250 million ounces this year;
  • Gold/silver ratio (closing in on a five-year high);
  • SLV ETF holdings (and now a gnat’s eyelash away from 2011 record highs); and
  • The difference between price and the cost of production.

The following aspects of the silver market are falling:

  • Price
  • Sentiment

It’s honestly hard to find a more distorted market anywhere else in the world today. At some point, this disconnect must be rectified.

But the disconnect is worse than that…

  • The RSI (Relative Strength Index), a measure of how overbought and oversold a security is, just reached its lowest reading ever on SLV. The index hit 11.68 on September 30, the lowest level since the fund’s inception, including the selloff in 2008. In fact, the index never fell below 15 until September 22, 2014.

In other words, SLV has never been this oversold.

This doesn’t mean the silver price can’t fall further, nor that if it bounces from such oversold levels it will be sustainable. But it does mean the rubber band is more stretched than at any other time we know of.

The disconnect is worse still. We all know that silver is more volatile than gold, so it’s not surprising that it has sold off more than gold in this recent downdraft. But…

  • During the waterfall decline in 2008, silver fell 27.1% more than gold (as measured from its high that year to its low). However, so far in 2014, silver has fallen 40.6% more than gold.

Last, silver is closing in on its longest bear market in modern history…

This updated snapshot shows six decades of bear markets. The black line represents silver’s decline from April 2011 through October 3, 2014.

The disconnect between the silver price and its fundamentals is greater than ever!

SilverSurfers · Oct 6, 2014 - 2:59pm


was that an outside reversal? thanks

SilverSurfers · Oct 6, 2014 - 3:25pm

Close but not quite

The low in the Dec14 silver back on Friday was $16.64. The low last evening was $16.67.

Nick Elway · Oct 6, 2014 - 3:42pm

Gold Above Ground

A compilation of Gold Above Ground Analysis (and links for reference) is in this forum:

That includes some detailed estimates of amounts mined in the world since 1900 (and total new world gold mined in the 1500's of just 141 tonnes)

My personal opinion is there is more than the 170K tonnes (2010 number), at least add 10K tonnes for 4+ years production since 2010. That puts Gold Above Ground conservatively up to 180K tonnes

I would not be surprised if Vatican gold and other hidden or unreported gold added another 100 K tonnes (how to know?)

I get very skeptical when people spout Gold Above Ground totals above 300K tonnes.

Karankawa · Oct 6, 2014 - 3:45pm
Marchas45 · Oct 6, 2014 - 6:02pm

Chinese Gold

So they are buying but who are Buying? The Chinese or the Elite getting ready for their New World Order. Wouldn't it be a Laugh wink if the Elite where the Chinese. Lol Keep Stacking

silver2013 · Oct 6, 2014 - 8:12pm

Tomorrow open interest

Tomorrow open interest numbers should tell a good story. Get ready. The metals should take a huge hit. Best time to buy is tomorrow. Millions of chinese know whats going to happen vs thousands of americans. I still think it has something to do with the education system of 70,s. Why in the world would americans in 1971 not have a huge protest over the usa currency not being backed by gold money. I guess americans were smoking too much weed on 1971.

FreddyKrugerrand · Oct 6, 2014 - 9:43pm

@ Silver2013

I guess Americans were smoking too much weed on 1971.


Guilty as charged! :-)

tyberious · Oct 6, 2014 - 10:22pm

China/India Gold Demand: 2013 Déjà Vu

"There are, however, some key differences between the snap-shot from 2013 versus the snap-shot of 2014, making this not quite “déjà vu all over again” (to quote the legendary Yogi Berra). The first of these differences is the overall context of the market itself.

In 2013; gold demand in China and India was exploding to previously unprecedented levels, and as a direct consequence of a dramatic drop-off in price. In 2014; there has not been any sudden/precipitous fall in price, nor are such demand levels “unprecedented” any more. Indeed, to borrow the propaganda buzz-words of the Corporate media; such massive, Asian demand now appears to be “the New Normal”.

More specifically; the context within the giant gold market of India (still the world’s largest repository and hub for the global gold trade) could not be more different. In the middle of 2013; torrid gold demand into that market was about to be (temporarily) curtailed via the extortion operation of the One Bank.

In the fall of 2014; import restrictions into India are still being relaxed, as the One Bank has ‘thrown in the towel’ with respect to its efforts to block the flow of gold into that nation. Meanwhile, gold-smuggling routes into that nation have been fully (and permanently?) re-established. In 2013 the flow of gold into India was about to be interrupted; in 2014, it appears that demand can only go higher.

This raises a question to which no commentator has been able to supply (definitively) a satisfactory answer: where is all this gold coming from? In 2013; with Indian/Chinese gold demand at this level, we saw what can only be characterized as a “panic response” by the One Bank: its draconian (but futile) attack on the Indian gold market.

In 2014, however, with gold demand in these two, giant markets at similar levels (and rising?); we see absolutely no sign of any similar panic from the Western banking cabal. Unless this is merely a façade; it suggests one of two explanations. Either the banksters are unafraid/unconcerned about such demand because they have (somehow) come up with a means of satisfying demand at this level; or, they have simply resigned themselves to some sort of near-term “default” event in global markets.

With respect to the former explanation; one area where the banksters have had some success is with respect to introducing various forms of their paper-called-gold and gold-fraud into China’s gold market. Indeed, here we also see some “Chinese entrepreneurs” seeking to emulate Western fraud in the gold market.

From fake-gold bars to bogus “collateralized loans”; we now see most of the gold crimes which are either well-known or long-suspected in the West being copied in China (but on a much smaller scale). Along with that; we see explosive growth in gambling (rather than investing) in the gold market by Chinese players, in one form or another of paper-called-gold.

Geopolitically, the One Bank has also been busy looting the gold of other nations, mostly through getting its puppet-government in the United States to overthrow the governments of other, gold-rich nations – and then installing new puppets (eager to please their Western masters). Ukraine and Libya are just two recent names which come to mind in this regard.

The near-total lack of transparency in these fraudulent markets makes any precise conclusion at this time impossible. The only inference which can be offered with some degree of reliability is that whatever the explanation to which one subscribes, 2015 is likely to be a “more interesting” year than 2014.

This brings to mind the purported, Chinese curse: “may you live in interesting times."'

philipat · Oct 6, 2014 - 11:09pm

World Gold Council

Most trade associations are in business to represent and further the interests of the product or service it establsished to provide a service for.

In the case of WGC, I agree that they seem to want the opposite, and I wonder:

  1. Why is this? Have they been corrupted by the same Evil Empire?
  2. If so, why would any Organisation with Gold interests (Miners etc.) pay good money to a member of an Organisation which seems to be acting against their own best interests?

Beats me!!

DayStar · Oct 6, 2014 - 11:14pm

Harvey's Up!

Harvey's Up!

Well, TF whodathunk JPM woulda sold their Manhattan headquarters to the Chicoms at a big discount no less. Mebbie they figgur they can't use an underwater skyscraper and they might as well dump it to the Chinese while the gettin's good. So, if JPM will bail on its headquartes, mebbie the CME will bail on Comex if the plan is to pull the plug ennywey. As you saw from the last two wars, the elites funded both sides ennywey. This time there mayne goal is to kell off most uf usuns. If the Chicoms did it, it ain't CME's ang Gipum's fault, right?

  • Harvey: Tomorrow is going to be a very interesting day. The open interest in silver with tomorrow's reading will probably be much higher due to the strength of silver today. The bankers must make another decision: do they raid again trying to knock down silver and force some longs to liquidate or do they wait and allow the OI to rise further?
  • Koos Jansen (IGWT): In week 39 (September 22 - 26) the amount of gold withdrawn from the SGE vaults accounted for 46 tonnes. Quite a strong week if one bears in mind this number equals wholesale demand of gold in China mainland. Year to date 1427 tonnes have been withdrawn from the SGE vaults. The price of deferred silver in Shanghai excluding 17 % VAT traded at a discount of just under 4 % relative to London spot. Shanghai silver remains scarce.
  • Koos Jansen (IGWT): 1) Because we have additional consolidation [ DS: confirmation?] about the workings of the SGE, Chinese import and PBOC purchases, the next chart is now confirmed to be fairly accurate. China holds (including September 2014) approximately 11,224 tonnes in non-government gold reserves and officially 1,054 tonnes in reserves at the PBOC. However, from various high ranking Chinese officials we know the PBOC has been steadily accumulating gold since 2009, which make current PBOC reserves likely to be 4,000 tonnes. In total there are about 15,224 tonnes of physical gold reserves in China mainland. 2) There is now so much evidence the demand numbers from the World Gold Council are erroneous the WGC is obligated to either revise their numbers upwards, or cease reporting on the Chinese gold market all together. Until then their numbers on Chinese demand are completely unacceptable. Harvey: Koos confirms the central bank of China does not buy any gold through he SGE. This makes sense as China will use its unwanted USA dollars to buy gold.
  • Chris Powell (GATA): Tocqueville Gold Fund manager John Hathaway's third-quarter letter to investors details how the fundamentals for a much stronger gold price remain in place, and he cites many of the developments to which GATA has called attention in recent weeks. Hathaway's letter concludes: "We take comfort that our positive view of the future dollar gold price is shared by those who understand the difference between synthetic and physical metal and who regard the real substance as a matter of strategic imperative, not as a plaything for macro traders. We believe that China's negative assessment of the future prospects for the U.S. dollar is correct and that our investment strategy of investing in the shares of value-creating gold miners offers sensible and dynamic exposure to the inevitable repricing of gold in U.S. dollars."
  • Chris Powell: Gold mining entrepreneur and market analyst Jim Sinclair today calls the recent clubbing of the gold futures price "a highly organized spoofing play" that won't work for long.
  • Chris Powell: Technology stock Alibaba is trading at 60 times earnings while successful gold mining companies are trading at less than 20 times earnings, notes John Ing, president of the Maison Placements investment house in Toronto. Ing thinks this indicates a "final panic selling stage" in gold.
  • Robin Bromby (The Australian): A China Gold Association video shown at China's first gold congress described the $US200-an-ounce fall in April last year as a "black swan, one in a 2-million-year event." Goode suspects the real meaning of that comment was that China does not intend to allow that to happen again; in April 2013 Shanghai was not trading when Comex in New York was open. Now it is. He believes China is still on course to made the yuan a reserve currency, backed by gold. China last reported its official gold holdings in 2009 at 1,054 tonnes. He thinks the figure may now be around 6,000 tonnes and the Chinese are waiting until they have 9,000 tonnes stored away before they announce they have passed the United States to become the world's biggest holder (a theory Pure Speculation has previously advanced). Goode says Russia is accelerating gold buying (another 7 tonnes in August). "With the increased level of co-operation between Russia and China, does Russia know China's intentions and is adding gold reserves as fast as possible?" he wonders. Kazakhstan is also buying up.


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12/11 8:30 ET Producer Price Index
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Key Economic Events week of 11/19

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