Changes in China
Last year the world got to see the massive buy up of gold by China as they made the most of low prices. Hong Kong May figures of a 16 month low of 53 tonne could at first glance look like they have slowed down. But the reality, in the wake of the Chinese Government opening up new gold import routes to the mainland, is they are now (openly) importing directly to Shanghai and Beijing where they don’t need to report numbers like they do in Hong Kong.
Considering reports last week of the head of the Shanghai Gold Exchange quoting 2000 t through there last year it gives us a small glimpse into what they can do. A smart big buyer does things quietly so as not to force the market up and it looks exactly like that is what China is doing. The jury is still out too as to whether the $15b/360t in fraudulent Chinese gold financing deals reported late last week will have an upward or negative effect on the price of gold.