Last week, our pal Koos Jansen was a featured guest on the German financial TV network, DAF. As the algo-generated divide between physical demand and paper price widens by the day, this video is a must watch for everyone.
Koos now works for BullionStar.com and the original source link can be found here: https://www.bullionstar.com/blog/koos-jansen/china-will-utilize-gold-pri...
In this 12-minute interview, Koos discusses most of these points:
- Chinese consumer gold demand in 2013 was 2,200 tonnes, not 1,100 tonnes as the Wold Gold Council states.
- Only for consumer demand China net imported 1,500 tonnes in 2013.
- The best way to measure Chinese wholesale demand is by withdrawals from the Shanghai Gold Exchange vaults (SGE) – although this might change in the future.
- The PBOC does not purchase gold through the SGE.
- The PBOC is definitely increasing its official gold reserves.
- China is the most important player in the gold market, they are the second largest economy in the world and accumulate gold for it’s monetary value and in anticipation of a new monetary system.
- China still has a lot to work to do regarding the internationalization of the renminbi, developing their financial markets and diversify their FX reserves. In this sense China has no rush, it wants a gradual shift away from the US dollar.
- When China will fully utilize the gold it is accumulating, I expect the price to rise.
One note...The first 30 seconds or so are in German but the remainder of the interview is conducted in English.