China to break Q1 gold record

It will come as no surprise to listeners of our Weekly Wrap that China appear set to break the first quarter record for gold consumption this year.  As the quarter finished yesterday these are still estimates with the last confirmed figures as of 20 March, but up to then we’ve seen 561 tonne withdrawn from the Shanghai Gold Exchange.  Extrapolating that on post Chinese New Year rates to yesterday would give in the order of 620 tonne.  As we’ve discussed before there is some double counting for actual consumer demand but this is relatively minor and the number will likely still represent not just a new record (and up by no less than 10% at that) but also 79% of last years global gold production for that period!

A particularly telling sign of the investment demand strength is that numbers have held strong after the traditional Chinese New Year buying period with 149 tonne in the 3 weeks since.

When combined with what looks like is going to be an astounding 150t into India this month, and as we mentioned in last week’s Weekly Wrap, it’s a heady demand cocktail when the world’s 2 biggest growing economies (7.8% India and 7.2% China) and 2 largest populations are also the world’s strongest gold buyers.

This is no April Fool joke either, these are hard numbers.  The fool’s might be the West for letting it all go…