China Sets Up Largest Gold Fund

Discussion in 'Gold' started by House, May 23, 2015.

  1. House

    House Well-Known Member Silver Stacker

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  2. Pirocco

    Pirocco Well-Known Member

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    One time I read that Chinese (State?) are buying up all the Yellow Metal of the world hinting that the price will explode.
    Another time I read that China (State?) doesn't have a big say due to small share of international trade.
    And everytime I read about gold "consumption", alike it's licked up like a lolly, instead of being stocked for later sales.
    Well heh!
     
  3. phrenzy

    phrenzy In Memoriam - July 2017 Silver Stacker

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    I know for a fact that nobody has good public figures for what China actually produces domestically, which is going to be the biggest factor in their actual total reserves.

    I'd be interested in more details on this fund though. If it's 16 billion dollars of new gold buying for the fund it could be big, if it's 16 billion of mostly existing reserves transferred into this fund to back international money transfers and for credit or gold purchases/transfers between members inside the fund then less interesting.

    A giant gold fund like this is good news whatever though.
     
  4. Pirocco

    Pirocco Well-Known Member

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    Or it's just 16 billion dollars to "water" 16 million existing ounces in speculators hands.
    Abit like how companies on the stock market can add and sell extra shares.
    "60 countries". Can I assume governments / States of those countries? Then it's tax money that is given to gold miners. I'm sure they will appreciate all that tax money.
    And anyway, in which degree does gold mining matter to the price? Over the last 5 years, the price doubled tripled with 1/3 again gone so far.
    This is what mining and recycling did:
    Year / Mining / Recycling (tonnes)
    1997 2527 631
    1998 2574 1108
    1999 2602 620
    2000 2618 619
    2001 2645 749
    2002 2618 872
    2003 2621 985
    2004 2493 878
    2005 2548 897
    2006 2486 1126
    2007 2476 956
    2008 2409 1217
    2009 2584 1672
    2010 2659 1653
    2011 2839 1611.9
    2012 2864.1 1590.8
    2013 3060.3 1254.6
    2014 3135.0 1175.9
    I don't see much correlation between mining/recycling trend and price. Rather the opposite, they go more against eachother instead.
    And that's no wonder, what is a total production of 4000 tonnes on an existing stockpile that is 45 times bigger, and thus has a price impact potential equally bigger?
    And that's why I don't understand the focus some lay on mining. They even ignore recycling, while in 2011 and 2012 it was over half what was mined and before and after still over 1/3.
    Gold mining, a "big thing", well, apparently it isn't for the price.
    Yet, it's exactly that price that "people like us stackers" bother about.
    There is a whole lotta Rosie less reason to bother about gold mining lol. :D
     
  5. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    You have missed the nuance of the situation. If China is the biggest producer of gold and keeps it to itself, it does not trade. Secondly, when it buys gold from other countries, it does not go on to resell it but keeps it internally, so again is not a trader.
     
  6. Oldsoul

    Oldsoul New Member

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    Yes it does. It exports masses of the worlds jewellery

    China is the worlds no 1 jewellery exporter (most of it classed as PM based)

    http://www.worldstopexports.com/jewelry-exports-country/3291

    29.9% of Chinas total exports is jewellery. Import raw material. Export bling.


    let alone all the plating on connectors etc. and the internal consumption is not the state it's bling or the ladies mostly with some small private stackers. The quantity of private demand and exported jewellery actually adds up quite nicely with imports. Some debate this - but it would be clinically insane of China to stack unnecessary gold about 2.3% of reserves....or introduce a PM Yuan etc.
     
  7. Oldsoul

    Oldsoul New Member

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    China 2015 gold output likely 450 tons: ministry
    http://www.marketwatch.com/story/china-2015-gold-output-likely-450-tons-ministry-2012-11-26-34855517

    "BEIJING--China aims to have domestic gold production reach 450 metric tons by the end of 2015, a rise of around 25% from 2011, the Ministry of Industry and Information Technology said Monday.

    The ministry forecast rising domestic demand for gold and a "huge amount of room" for the industry's development due to gold's safe-haven and wealth-preserving properties, it said.
    "

    Producing internally is good for trade balance and facilitates the Chinese jewellery industry which accounts for nearly 30% of Chinas total exports.
     
  8. Oldsoul

    Oldsoul New Member

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    The real story is Chinas domestic demand from the population buying bling and non state stacking is forecast to rise by 200 tons. I expect a hard crash in China though what way that drives demand is anyones guess.
     
  9. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    I think the inference that China does not have a big say is that it does not dump tonnes at a time on the world a la the large bullion banks.
     
  10. kevalie

    kevalie Member

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    "China does not have a big say in gold pricing because it accounts for a small share of international gold trade"

    Reckon that's because at this stage China is happy with the price of the gold and keep acquiring the physical and let the paper market be.
     
  11. Pirocco

    Pirocco Well-Known Member

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    I'm not sure about that "nuance", but let's pick a margin scenario to make clear the contradiction that I see between both statements: imagine a country that doesn't internationally trade at all, a completely "internal" market, how could it then affect any price in the outside? I can't see much "nuance" (interpretation room?) here, it's just a logical contradiction. It's claimed that China doesn't have a big say in the gold price due to a small share of international gold trading, but how could China demand then make the gold price rise?
     
  12. Pirocco

    Pirocco Well-Known Member

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    That is a possible interpretation. If "international trading" would be defined as trading between large institutions / governments, then we're talking about a part of its trading on the gold market, not its whole. And that wording"big say" is a hint to power, control. And actually, that is what is described at the end of the opening post:
    "Therefore, the Chinese government seeks to increase the influence of RMB in gold pricing by opening the domestic gold market to international investors."
    This "gold sector" fund, is then a cooperation between China government and 65 other governments, to control the gold price.
    This change seen on the timeline, China government that increases its level of cooperation in worlds gold price control.
     
  13. Pirocco

    Pirocco Well-Known Member

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    This is an article from a year ago, announcing this:
    http://www.forbes.com/sites/kitcone...et-with-international-shanghai-gold-exchange/
    And another from september 2014:
    http://www.gold.org/news-and-events...hai-gold-exchange-announce-future-cooperation
    And closer to the original source, PBOC (Peoples Bank of China) Governor Zhou Xiaochuan, a claim from 2009:
    http://www.cfr.org/china/zhou-xiaochuans-statement-reforming-international-monetary-system/p18916
    ... which didn't exactly turn out that way, rather the opposite, China State piled up US Treasuries (read: dollars).
    and this particular subject, also september 2014:
    http://www.en.sge.com.cn/news-announcement/news/520475.shtml
    It all reads just like I described earlier: control the gold price. Just check the last line: "do its utmost to prevent systemic risks". The only ones that threat their system are... speculators. People with fiatcurrency bank savings, that try to use gold to avoid the theft along it, finding the very same there as counterparty.
     
  14. SmartyFarty

    SmartyFarty Member

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    They probably don't trust the US paper market
     
  15. Oldsoul

    Oldsoul New Member

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    The Chinese publish them actually. from memory it is something like 450 t. To lazy to find a reference right now
     
  16. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    They publish some numbers, but do you trust the numbers published?
     
  17. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    I know that I have ordered number 23 off the menu, but I got sweet and sour pork instead.
     
  18. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    Correction, "pork".
     
  19. Oldsoul

    Oldsoul New Member

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    Yes. Probably overstated a touch but that is the norm for Chinas economic figures, especially gdp.

    "China Gold Association announced China's gold production more than 450 tons in 2014. China was the World's largest gold producer in 8 consecutive years. "

    http://www.huixgp.com/en/news/industry_news/1246
     
  20. SmartyFarty

    SmartyFarty Member

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    Western paper markets are rigged.

    China is calling the Americans bluff
     

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