I found this to be very interesting detail on the operation of the Shanghai Gold Exchange. It was provided by comment at Dave's GoldenTruth site here.
The market is a hybrid of a physical and futures market.
I don't know if you are familiar with the operation of Shanghai Gold Exchange. The most frequently traded gold products are Au9999, Au9995 and Au(T+D). The most frequently traded silver product is Ag(T+D).
Au9999 and Au9995 are cash products. Au9999 is 1 kg of gold 99.99% pure and Au9995 is 1 kg of gold 99.95% pure. You just trade them like trading stocks.
Au (T+D) (the contract size is 1kg of gold no less than 99.95% pure) is similar to futures contracts but it does NOT have a specific delivery month. Delivery can take place every trading day. Between 15:00-15:30 (Beijing time, GMT+8) of every trading day, all the longs/shorts can submit their intentions to take/make delivery.
If there are more intentions to take delivery than those to make delivery, all the shorts of Au (T+D) must pay the longs Deferred Compensation Fee: short to long. If there are more intentions to make delivery than those to take delivery, all the longs of Au (T+D) must pay all the shorts Deferred Compensation Fee: long to short.
For example: http://www.sge.sh/publish/sgeen/sge_price/sge_price_daily/10378.htm
On Aug 21, 2013, 6,848 kg of gold was delivered for Au(T+D). There were more intentions to take delivery than make delivery. All the shorts of Au(T+D) had pay longs deferred compensation fee, short to long.
The Paying Direction of Deferred Compensation Fee is, IMO, more important than the amount of delivery.
The delivery of Au(T+D) is actually to change the names of the owner of the gold. The gold is still in the vault (usually a bank vault). The 6,848 kg of gold just changed owners. It is still in the vault(s).
The Shanghai Gold Exchange also publishes weekly and monthly reports. But in those reports, the definition of delivery is DIFFERENT. There, the SGE defines delivery as the amount of gold moved out of the vault(s).
For example, in the monthly report of July, the SGE reports that 235417.4 kg of gold was delivered. That means 235417.4kg of gold was moved out of the vault(s).
http://www.sge.sh/publish/sge/docs/20130812162935744053.pdf
(I can't find an English version for you)
As for silver, Ag(T+D) is the equivalent of Au(T+D). The contract size is 1kg of silver 99.99% pure. But since silver is not VAT free in China. Silver market participants usually choose not to make/take delivery of silver at the Shanghai Gold Exchange because making/taking delivery of silver at the Shanghai Gold Exchange is difficult to evade the VAT.
