Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Strong Chinese Gold Demand Continued in October

  by    0   0

Gold demand remained strong in October according to the latest data released by the World Gold Council.

Both gold withdrawals from the Shanghai Gold Exchange (SGE) in October and gold imports in September were up year-on-year, and Chinese ETF gold holdings set a new record. These all signal that the Chinese gold market continues to recover after it was hit hard by the coronavirus pandemic.

China ranks as the world’s number one gold consumer.

Gold withdraws from the SGE totaled 137 tons in October. This was down 28% month-on-month, but the monthly dip was seasonal. Physical wholesale gold demand in China tends to be lower in October as manufacturers’ stocks remain ample following their active replenishing in September. There are also fewer trading days in the month due to the seven-day National Day Holiday. Comparing gold outloads in October to previous years reveals demand was relatively strong. Gold withdrawals from the SGE were 45% higher year-on-year and 50% stronger than the pre-pandemic level in 2019.

According to the World Gold Council, three factors helped drive higher gold outtake.

  • A combination of stronger gold consumption in Q3 compared to the same quarter in 2020 and 2019,
  • Heritage gold jewelry’s popularity among young consumers has raised the industry’s expectation for Q4
  • Local jewelers are including more products of heavier weight in their inventories as their adoption of the per-gram pricing model increases: chunkier products lead to higher profits using this method.

China imported 85 tons of gold in October. That was 8 tons more than September.

Total gold imports in Q3 totaled 228 tons. That represents a 171-ton year-on-year increase and it was 43 tons higher than 2019.

Not only was Chinese gold consumption higher in Q3 2021 than both 2020 and 2019; Chinese mine output has also been squeezed. This has driven imports higher. China ranks as the world’s biggest gold producer. While gold demand rebounded in the first half of 2021, Chinese mine output did not. Gold production fell 10.2% to just 152.8 tons.

Chinese gold investment demand is also strong. Collective holdings in Chinese gold ETFs hit 72 tons last month after five consecutive months of inflows. That’s the highest amount of gold ever held by Chinese ETFs in tonnage terms.

Like the US, the Chinese economy is showing signs of stagflationary pressure. The World Gold Council says slowing economic growth might be supportive of gold investment demand in the coming months.

Overall gold demand was up 69.2%, coming in at just over 547 tons through the first 6 months of the year. China’s year-on-year gold consumption surged 93.9% in the first quarter alone.

According to the Global Times, the Chinese government implemented macroeconomic policies aimed at bolstering domestic gold consumption.

Last spring, China gave the green light for the import of 150 tons of gold. The report notes that China’s returning appetite for gold could potentially “support global prices.” Reuters called the size of the expected Chinese gold imports a “dramatic return to the global bullion market.”

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Trade Deficit Grows for Second Straight Month as Dollar Weakens

A shrinking trade deficit was the primary reason GDP jumped in the third quarter. But that trade deficit relief is already reversing. The October trade deficit swelled to $78.2 billion, a 5.4% increase. It was the second straight month of trade deficit growth.

READ MORE →

Central Banks Start Q4 Buying More Gold

After adding a historically high amount of gold to reserves in the third quarter, central banks kicked off Q4 buying more gold. According to data compiled by the World Gold Council, central banks globally added another 31 tons of gold to official reserves in October.

READ MORE →

Investors Fleeing Housing Market as Bubble Deflates

In another bad sign for a housing bubble that is quickly deflating, investor purchases of single-family homes tanked in the third quarter. Meanwhile, overall home sales continue to tumble and prices are falling.

READ MORE →

Consumer Confidence Declines for Second Straight Month

The powers that be keep telling you that the economy is fine and inflation has likely peaked. But you’re not buying the story. Consumer confidence fell for the second straight month in November as worries about inflation and the trajectory of the economy persist.

READ MORE →

Recession Warning: US Small Businesses Struggling to Pay Rent

In another sign of a struggling economy, small businesses are having an increasingly hard time paying rent. According to Alignable’s November Rent Poll, 41% of US small businesses reported they couldn’t pay their rent in full and on time in November. That was a 4 percentage-point increase from the previous month.

READ MORE →

Comments are closed.

Call Now