Monday, April 23, 2012

China Gold Imports and Gold Price

"A year ago China imported about 5 tons (t) gold a month through Hong Kong. That's been fairly consistent over time. We can track 5–15 t/month through Hong Kong. But around last June, it suddenly jumped to 25 t for the month. Then it went to 40 t. Then it went to 55 t. In November, it peaked at 100 t. If it kept up that pace, which it probably won't, that would be 1,200 t/year. That's about 45% of yearly mine supply in the world. So China is one of these wild cards because it hadn't really been out there in the market like this. 

If China does with gold what it's been doing with other commodities, it could keep that 11-year positive cycle going by looking for gold outside its borders. We're going to get a better picture of how much it truly wants to buy. The numbers could be pretty staggering and could be multiples of what we saw last year and the year before."

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