Shanghai Gold Exchange Has 49 Tonnes of Gold Withdrawn the Week Ending 27 November

There were 48.86 tonnes of gold withdrawn from the Shanghai Gold Exchange for the week ending 27 November.

Year to date, there have been a record 2,362 tonnes of gold withdrawn, far in excess of any other year at this time.

What is the reason for this?  Why is there such a strong movement in the 'Silk Road' countries to continue to buy gold in large volumes?  What can the central banks of the West do about this?

Gresham's Law informs us of the why's and the what's of this phenomenon.

"When an official market or cartel overvalues one type of money or asset and undervalues another with respect to its fair market value and risks, the undervalued money or asset will leave the country as best it can, or will disappear from circulation into hoards, while the overvalued money or assets will flood into circulation."

And so it is that gold is flowing from West to East.

More of the same sort of pricing games with 'synthetic' paper gold will only increase the flood of bullion into Asia.  The price must be allowed to float according to the market.

Shanghai Gold Exchange Has 54 Tonnes of Gold Withdrawn in the Latest Week

There were 54 tonnes of gold bullion taken off the Shanghai Gold Exchange into mainland China in the latest week.

The second chart shows that the SGE is well on its way to a record year.

Shanghai Gold Deliveries and Deliveries on the Comex - The 'Rest of the World' According To Bloomberg

Gresham's law is an economic principle that states 'when a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.'

Notice the 'sea change' that occurred with Shanghai gold flows starting in 2013.

And notice how the Western financial media views this phenomenon.

China Savers Buying Gold As 'Rest of the World' Exits

The 'Rest of the World' apparently does not include India, Russia, Turkey, much of the Mideast, and the European central banks who have been busy trying to repatriate their gold from New York and London.

I have included a chart showing 'Silk Road' gold consumption below.

In addition to all the wealthy individuals in the US and UK who are buying it for their own private vaults.

Who are the idiots who own most of the gold in the central bank crowd anyway?  The numbers are a bit hard to come by because for some reason the bankers are notoriously secretive in response to questions.

The 'official gold reserves' of all central banks in the world is also included below.  And the biggest goldbugs are the US, Germany, Italy, France, the IMF, Russia, China, Switzerland, Japan and the Netherlands.

True, a few central banks have disgorged some of their gold. The UK sold quite a bit of their sovereign reserves at the bottom, the lowest price for gold in dollars. Brown's Bottom it was called, presumably to rescue some 'trading houses' who were caught short.

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it."

Sir Eddie George, Bank of England, September 1999

One might wonder what has some of the NY and London banking crowd so worked up?  What have they gotten themselves into now?  Their spokesmodels have been quite active in the media lately.

I am sure the truth of this will come out some day.  Most likely over some long weekend.

This is how Nixon unilaterally took the US off the international gold standard, and declared a new fiat regime for 'the rest of the world' under the rule of the US dollar reserve, thereby rewriting the Bretton Woods agreement by executive decree.

Is it true that only a few 'goldbugs' really care about this and no one else?

Most of the central banks know the truth of things.  They are just keeping quiet about it for now, for whatever reason.  I suspect that they are receiving pressure related to the antics of one or more of the Banks.

"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."

Salvatore Rossi, Central Bank of Italy, 30 Sept 2013

Do these fellows take us for complete fools?  Really?

Shanghai Gold Exchange Withdrawals of 49 Tonnes in the Latest Week

There were about 49 tonnes, or 1,575,000 troy ounces, of gold delivered from Shanghai in the latest week.

No matter what the pundits say about 'gold bugs' and all that sort of nonsensical disparagement, the central banks of the world have been net buyers of gold since about 2007, and the major countries of The Silk Road are buying gold bullion by the tonne each and every week.

Are they all unenlightened idiots? Goldbugs?

Bloomberg seems to imply that they are.  China Savers Turn To Gold As 'Rest of World' Exits

Are the central bankers of the world fools and dupes?

Or are we being misled by the global Banks?    Hard to believe, right?

Gold bullion is moving from West to East.

It is Gresham's Law in action.  

And they are dissembling, most likely to save a couple of the Banks once again and support a policy error that is both wrong-headed and unsustainable.

About 45 Tonnes of Gold Were Taken Out of the Shanghai Exchange in the Latest Week Ending 6 November

Another record year in the making for China gold bullion taken off the exchange.

Pet rocks.

Latest Shanghai Gold Withdrawals Cross the 10,000 Tonne Mark - 2013 a Pivotal Year

In the first chart we see that there were about 57 tonnes of gold bullion withdrawn from the SGE into China in the latest week.  This is not 'official reserves' but all gold without regard to the receiving party.

This pushes the cumulative withdrawals of Shanghai gold over the 10,000 tonne mark.  Not bad for less than seven years in the business.

This does not include gold that flows through Hong Kong, or through any other non-exchange means purported to be used by the People's Bank of China.

On the second chart you can see that Year-To-Date Shanghai has released 2,119 tonnes into China.  Compared to prior years 2015 is clearly going to be a new record if the withdrawals maintain this pace.

One thing that struck me on that second chart tonight is that Shanghai withdrawals took a definite leg up in 2013.

This is also the same year that the price of gold in Dollars was smacked lower, and the ratio of potential claims to registered gold on the Comex began to climb, and eventually start to go parabolic this year.

Perhaps the bullion bank apologists and shills are right, and this is all just meaningless, an optical illusion, or some fantasy.  Gold is just like pet rocks,  and the majority of the people in the world, and throughout recorded history for that matter,  are just confused and demented.

As I mentioned earlier this evening, the tails risks look rather fat.  One might wonder that even a dingy gray swan with a weak wing could trigger a fairly impressive set of 'unforeseeable incidents.'

They'll never learn.  Why should they?  Winning....

But perhaps we are much closer to the end of this than most people might imagine.  Given the explosive ingredients in place it may be hard to miss.


Related: LBMA Apparently Altered Its Gold Flow By 2,200 Tonnes


These charts are from Nick Laird at Goldchartsrus.com.

Shanghai Gold Exchange Withdrawals Running at Record Pace

Withdrawals of gold from the Shanghai Exchange alone are at 1,958 tonnes for the year.   The first chart below compares that pace to the prior years.

As I noted the other day, the mispricing of value and risk in the gold market, primarily driven by traders in London and New York, is calling a form of Gresham's Law into action.

Gold in the New York and London vaults is heavily leveraged and hypothecated.  The full extent of this is not disclosed and can only be surmised.

If the tide of gold keeps going out at these amounts, we will see who is wearing what, as the old traders say.

Is this a 'problem' that we need to save them from?  Hardly.  This is a problem which they have created by manipulating this market and trading it with reckless disregard as they have done with so many others.

The only 'help' they require is to allow the market to set the price, and abide by some modest rules of leverage and risk management, rather than sacrificing safety and fairness for short term gains.

Gold is flowing from West to East.  Of this there should be little doubt except for the most hardened apologists for the bullion banks.

Gold Withdrawals From the Shanghai Exchange 63.2 Tonnes In the Latest Week

There were 63.2 tonnes of gold bullion withdrawn from the Shanghai Exchange this week.

As can be seen in the second chart, the gold withdrawals are occurring at a record pace.

This significant demand for physical gold is increasing, with what appear to be artificially low prices, that are doing what prices that are below a fair and efficient market-clearing price are theoretically expected to do,

The market cannot treat gold like one of the paper currencies indefinitely.

They may try to expand their leverage [gold hypothecation, leasing, futures, forwards, derivatives] freely, given the craven silence of the regulators and professional courtesy amongst the looting class.

But they cannot create more physical bullion, and therein lies their limits.

Gold is moving from West to East.

Shanghai Exchange Has 73 Tonnes of Gold Withdrawn In 4th Largest Week In History

There were a little over 73 tonnes of physical gold withdrawn from the Shanghai Gold Exchange in the latest week ending August 21st.

This is the 4th largest withdrawal of bullion in its history.

It is hard to tell what exactly is going on in such a dodgy, highly leveraged market, with its determined attempts to keep the price knocked lower so often during the late London to NY trading hours.

But I am sensing a change in the market, and more things running under the surface than meets the eye.

Goldman is no major player in the gold bullion market, but it did strike me as odd that they are suddenly stopping large amounts of bullion for their own house account this month. It is not that they are a player in gold, because they are not.  But that they are wired into many sources of information, are good at spotting trends, and are more like a hedge fund, comfortable running on the edge of the markets.

And the gold chart, for what it is worth in these times of market interventions, seems to be trying to form a rounded bottom in the form of  a cup and handle, with a successful retest of the handle this week.  This calls out a price around the bottom of the old trend channel at 1270.

It could also be nothing.  I will pursue the details of such a chart formation if we see the right kinds of follow through next week.

And I will certainly be watching silver very carefully for any signs of life.  It may be pivotal next month.

Let's see what next week brings.  Gold is just one market among many, and it is certainly not the largest one in play.

And while I have your attention, I thought I would include a long term chart of the relation of deliverable gold at current prices to open interest.  It might mean nothing.  But it doesn't seem to be anything familiar before 2013
.

The charts below courtesy of data wrangler Nick Laird at goldchartsrus.com.

China On Track For a Record Year For Gold Bullion Withdrawals From the Shanghai Exchange

In the latest week 65.3 metric tonnes of gold bullion were withdrawn from the Shanghai Gold Exchange.

Comparing the yearly demand at week 32 for China with prior years shows that it appears to be a record year in the making with 1,585 tonnes so far.

So much for the 'weak demand' in China.

Shanghai Gold Exchange Has 73.3 Tonnes of Bullion Withdrawn Its Third Largest Week

For the week ending July 24th there were 73.289 tonnes of gold bullion withdrawn from the Shanghai Exchange into China.

That is about 2,356,296 troy ounces in one week.

I have included the most recent statistics from the Comex Gold Warehouses below.  There are currently 351,519 ounces of gold available for delivery at these prices there for the month of August.

Nine out of ten Americans will notice that in terms of technical analysis this is 'a lot less.'

But as the very serious people like to point out, the Comex is not really 'a physical exchange.'  Yep.

And as you may have seen in the posting from earlier today showing the sea change in leverage over even the past ten years there, it is seemingly getting a lot less physical all the time, even compared to just five or six years ago. Winning...

Even the US Mint seems to be getting in on the act.  The mint sold 202,000 ounces of gold in the form of coins for the month of July, one of its largest monthly sales totals in several years.

That's a lot of pet rocks.

Do the math. I wonder where the poor, deluded ignoramuses who obviously do not understand finance are getting all that money to spend on such worthless trifles.  Does the US Mint take food stamps?

While they last.

This chart is from the date wrangler Nick Laird at sharelynx.com.

Shanghai Gold Exchange Has 46.2 Tonnes of Gold Withdrawn - What Will China Do

There were 46.2 tonnes of gold withdrawn from the Shanghai gold exchange in the week ending June 26th.

Since 2009 there have been a total of 9,076 tonnes of gold withdrawn from Shanghai.

I have also included two slides from a recent presentation by Zhang Bingnan, the Chairman of the China Gold Association.

In them he talks about China gold reserves reaching 9816.3 tonnes at the end of 2014, the second largest in the world.  That is interesting because it sounds as though he is talking about China's official reserves, which are not transparent yet, although there are some expectations of an official update later this year.   He *might* be misusing the term reserves here to mean all the gold in the nation, but that does not seem quite right. 

And if these are in fact the official reserves, to whom would the Chinese be second?  The US would have less than this number, and the only entity I can think of that would have more would be to lump the European community together.    If anyone knows if he clarified that point in his discussion at the LBMA I would like to know.

Below that are two charts from a talk titled The World Needs New Reserve Currency from the perspective of global liquidity by Yao Yudong of the People’s Bank of China.

In them he discusses the potential role of gold and the renminbi in international liquidity and as a new form of world reserve currency.

Playing this kind of sea change is not the usual Wall Street task of getting tips from privileged cronies, and asymmetrical information in the equity markets, and playing against the rubes with the artificially manufactured market inefficiencies in which insiders excel.

What will China do?  And what will others do in response?

From a practical standpoint it is not possible to forecast how and when any changes may come, and exactly what form they may take.   This is a generational change in the character of international relationships and values. 

What is happening now has been happening since at least 1999.   If by this time a pundit or an analyst do not understand this, then they understand nothing.  And this is how it is with some.

In this sort of change, almost everyone will be taken by surprise when the time comes.  It is just that some will be in a better position for it than others.

But it is in human nature perhaps, that most will cling to what is transitory and base, while trampling what is of lasting value in the dust.  There are few things that we can surely know:  change will come, and in the end, neither money nor gold nor any vestige of earthly power and position will remain.    Only faith, hope, and love will endure, and the greatest of these is love.

Related:  COMEX:  Trading From Physical to Paper

Shanghai Gold Exchange 54.2 Tonnes of Bullion Withdrawn - Total More Than All Official Gold of US

During the latest week there were 54.2 tonnes of gold withdrawn from the Shanghai Gold Exchange.

Since the beginning of 2009 there have been 9,030 tonnes of gold taken out of the Shanghai Exchange into China.  

That is more than 290,320,000 troy ounces of fine gold in bars.

Just for the sake of comparison, as shown in the last chart below, the total official holdings of the United States are about 261,498,926 ounces of gold.

So it does seem that since 2009 more gold has been withdrawn from the Shanghai Exchange than is in all the official holdings, vaults, forts, mints and Federal Reserve Banks of the United States.

Related: Why Shanghai Gold Withdrawals Equal Chinese Gold Demand

Current Report: May 31, 2015

Department of the Treasury Bureau of the Fiscal Service STATUS REPORT OF U.S. TREASURY-OWNED GOLD May 31, 2015
Summary	Fine Troy Ounces	Book Value
Gold Bullion	258,641,878.074	$10,920,429,098.79
Gold Coins, Blanks, Miscellaneous	2,857,048.156	120,630,858.67
Total	261,498,926.230	11,041,059,957.46
Mint-Held Gold - Deep Storage
Denver, CO	43,853,707.279	1,851,599,995.81
Fort Knox, KY	147,341,858.382	6,221,097,412.78
West Point, NY	54,067,331.379	2,282,841,677.17
Subtotal - Deep Storage Gold	245,262,897.040	10,355,539,085.76
Mint-Held Treasury Gold - Working Stock
All locations - Coins, blanks, miscellaneous	2,783,218.656	117,513,614.74
Subtotal - Working Stock Gold	2,783,218.656	117,513,614.74
Grand Total - Mint-Held Gold	248,046,115.696	10,473,052,700.50
Federal Reserve Bank-Held Gold
Gold Bullion:
Federal Reserve Banks - NY Vault	13,376,987.715	564,805,850.63
Federal Reserve Banks - display	1,993.319	84,162.40
Subtotal - Gold Bullion	13,378,981.034	564,890,013.03
Gold Coins:
Federal Reserve Banks - NY Vault	73,452.066	3,101,307.82
Federal Reserve Banks - display	377.434	15,936.11
Subtotal - Gold Coins	73,829.500	3,117,243.93
Total - Federal Reserve Bank-Held Gold	13,452,810.534	568,007,256.96
Total - Treasury-Owned Gold	261,498,926.230	$11,041,059,957.46

Deep Storage: That portion of the U.S.Government-owned Gold Bullion Reserve which the Mint securesin sealed vaults that are examined annually by the Treasury Department's Office of the Inspector General.
 

Deep-Storage gold comprises the vast majority of the Reserve and consists primarily of gold bars. (Formerly called "Bullion Reserve" or "Custodial Gold Bullion Reserve").
 

Working Stock: That portion of the U.S. Government-owned Gold Bullion Reserve which the Mint uses as the raw material for minting Congresssionally authorized coins.
 

Working-Stock gold comprises only about 1 percent of the Reserve and consists of bars, blanks, unsold coins, and condemned coins. (Formerly listed as individual coins and blanks or called "PEF Gold").

Shanghai Gold Exchange Sees Offtake of About 46 Tonnes of Gold For the Week

There were 46.15 tonnes of gold withdrawn from the Shanghai Gold Exchange in the latest week.

This chart is from the data wrangler Nick Laird at sharelynx.com.

Shanghai Gold Exchange Withdrawals 42.5 Tonnes For the Week

Gold is moving from West to East.

You may read about the roots of this phenomenon here.

This chart is from Nick Laird at Sharelynx.com.


Related:  Germany Leads Western Gold Buying

Shanghai Gold Exchange Sees 45.48 Tonnes in Withdrawals In Latest Week

Withdrawals from the Shanghai Gold Exchange in the latest week were 45.48 tonnes.

That is 1,462,216 troy ounces taken out of their exchange in one week

They use real physical bullion that moves between suppliers and customers, and actually leaves the exchange?  How barbaric!

There are a total of 372,631 deliverable (registered) ounces of gold at these prices in all the Comex warehouses.

It is a good thing that you do not need to have the product to set the prices in the thoroughly modern markets of London and New York.

Related: China Sets Up Gold Fund for Central Banks