There has been a steady migration of gold from West to East over the last three decades.
When the World Gold Council published its first Gold Demand Trends report 30 years ago, Asian demand made up 45% of the world’s total. Today, the Asian share of global gold demand is approaching 60%.
After ending 2022 on an upward trend, China’s gold market continued to rebound during the first quarter of 2023.
Wholesale gold demand in China during Q1 hit the highest first-quarter level since 2019. Meanwhile, gold imports charted the strongest start to a year since 2015.
More bad news for the dollar.
Last week, China and Brazil announced a trade deal in their own currencies, completely bypassing the dollar.
This represents another small shift away from dollar dominance.
After ending 2022 on an upward trend that continued into January, Chinese gold demand surged again in February as the economy continues to rebound from government-imposed COVID policies.
Gold withdrawals from the Shanghai Gold Exchange (SGE) totaled 169 tons in February. This is a reflection of strong wholesale demand and signals an ongoing rebound in the world’s biggest gold market.
China imported 1,343 tons of gold in 2022, the highest import level since 2018. Total gold imports for the year were up 64% over 2021.
China ranks as the world’s biggest gold consumer.
As we’ve reported central banks globally have been piling in gold. The question is why?
China is likely quietly stockpiling gold in a bid to further minimize its dependence on the US dollar.
Gold is migrating from the West to the East.
As Bloomberg described it, many western investors – particularly at the institutional level – are dumping bullion. Meanwhile, Asian buyers are taking advantage of lower prices to snap up less expensive jewelry, coins, and bars.
Gold demand in China showed renewed strength over the last two months despite scattered COVID-19 lockdowns. Both gold withdrawals from the Shanghai Gold Exchange (SGE) in August and gold imports in July were up.
China ranks as the world’s number one gold consumer.
Last week, I asked the question: is the US undermining the dollar’s credibility?
It appears the answer is — yes.
In another blow for dollar dominance, Saudi Arabia is reportedly considering pricing at least some of its Chinese oil sales in yuan.
