China Gold Imports from Hong Kong: Steady in June 2013

In June 2013, the gold imports from Hong Kong to China were essentially flat.
The summer isn't a good period for gold either, so this is pretty normal. But anyway, gross and net imports are still at an all time high, compared to history (see chart 2).

And what's also interesting is that the ratio between net imports and gross imports are at an all time high too: 89%. China wants to keep all its gold.

Read More

China Gold Imports Edging Upwards in May 2013

The gold imports in May 2013 were a bit disappointing again, gross imports didn't budge much.

But the net imports surged to 106 tonnes in May 2013, meaning that China kept all the imports from Hong Kong. The ratio of net imports to gross imports is 83%.

But it's still a positive development for the gold market, net imports continue to trend higher.

Read More

LIBOR Vs. SHIBOR

As an analogy on this post, we can do the same analysis in China. The key is that SHIBOR affects Chinese adjustable mortgage rates.

Following site gives us the Shanghai LIBOR rates, namely: SHIBOR.
http://www.shibor.org/shibor/web/ShiborJPG_e.jsp



As you can see, we had a pretty big spike in SHIBOR (Chart 1), which also means a surge in China interest rates/funds rate.

Chart 1: SHIBOR

As you know a rise in interest rates means a rise in bond yields too, because there is this correlation between the funds rate, the mortgage rates and the bond yields.

Chart 2: 10 year China Bonds

As SHIBOR increases, so does the Chinese funds rate increase together with rising adjustable mortgage rates. And that has negative implications on the Chinese real estate market as you can see below.

So watching SHIBOR is a must, if you are invested in Chinese government bonds and Chinese real estate.

If SHIBOR goes up, Chinese bonds and real estate go down.

Read More

China Gold Imports from Hong Kong in April 2013: Disappointing

The China Gold Imports from Hong Kong in April 2013 came in lower than expected, but still very high. I had hoped for a higher number with the decline in gold price...

Read More

The Great Disconnect in the Paper and Physical Precious Metals Market

Over the last few months, precious metals investors have seen their net worth decline due to declining precious metals prices (GLD), (SLV). A lot of this decline in precious metals prices was due to a decrease in demand, which was the result of selling by hedge funds as the World Gold Council reported here.

First quarter gold demand of 963 tonnes was down 13% compared with Q1 2012 due to an outflow in the total gold ETF holdings of 177 tonnes. 2013 marks the first year in a decade where ETF's are actually selling gold. While ETF holdings were reduced, this selling has been countered by an increase in physical demand for gold by China and India. Total demand in China rose 20% to 294 tonnes in Q1 2013 as compared to Q1 2012 (50 tonnes increase).

This huge increase in demand for physical gold can be witnessed on Chart 1, which gives the net imports of gold from Hong Kong to China.

Chart 1: Net Gold Imports from Hong Kong to China

While Chinese demand for gold was strong, Indian demand increased at an even higher pace. The Indian demand for gold increased 27% on the same quarter last year to 257 tonnes.

On the supply side we see a total increase of 1% in the first quarter of 2013 as compared to Q1 2012. Mine production increased 4% while recycling of gold decreased 4%.

(click to enlarge)

Chart 2: ETF gold holdings in tonnes by region to end Q1 2013 (Source: World Gold Council)

So, the reason for the decline in precious metals prices is evident from an increase in supply (mine production increased) and a decrease in demand for gold (ETF outflows) (Chart 2). But there is an important point I need to make here. While the supply side is pretty constant at 1% increase, the demand side is the critical indicator we need to look at with its 13% decline. The decline was a result of hedge funds converting their gold holdings into equities. The Dow Jones (DIA) hit an all time high last week, fueled by a bullish prospect in the equity market of Japan, which on itself was a result of the massive Japanese monetary stimulus announced in April 2013. Although investors are cheering the bull market in equities, the macroeconomic conditions keep worsening. A few examples were a deterioration in PMI, capacity utilization, ISM manufacturing, vehicle sales, ADP employment, initial claims, PPI, mortgage applications, wages.

To see what this means for gold, read on here.

Read More

China Gold Imports Hit Record High

An update on the China Gold Imports from Hong Kong has just been put out on Bloomberg. It is amazing, how much they are buying, imports more than doubled.

http://katchum.blogspot.be/2013/04/china-gold-imports-from-hk.html

And the thing is, the massive drop in the gold price in April is not even counted in the numbers yet.

Read More

China Gold Imports from H.K.

This page is created to monitor China Gold Imports from Hong Kong.

I'm monitoring the gross imports, net imports from Hong Kong to China.
I'm also monitoring the ratio between net imports and gross imports which measures the degree of retaining of gold by China.

Read More

China Boosts U.S. Treasury Holdings

China buys more U.S. treasuries to keep the yuan from rising.

Chart 1: China U.S. Treasury Holdings

Read More

China Gold Imports from Hong Kong Double in February 2013

It was about time that China made use of the unbelievable low price of gold.

China imported 97 tonnes of gold from Hong Kong.

Net imports were 61 tonnes.

This makes the ratio go from 38% in January 2013 to 61/97 = 63% in February, almost as high as in December 2012 when it was 74%.

This is a huge increase. So people are buying on this news. Gold almost went back up to $1600/ounce today.

Chart 1: China Gold Imports from Hong Kong

Read More

China Gold Imports from Hong Kong Disappoint

China gold imports plunged in January: 51 tonnes. This was not expected, considering the low gold price in January 2013 ($1660/ounce). The result was a 5% decline in the gold price in February ($1580/ounce).

Chart 1: China Gold Imports from Hong Kong

Net imports were 19.58 tonnes. That's 19.58/51.3 = 38%. That's a steep decline from the previous month, which was 74%.

I don't expect February to be much better as we have the Lunar New Year and a shorter month.

Read More

China Ups U.S. Bond Holdings

Surprisingly, China bought even more U.S. bonds and is now again the champion, just before Japan. Almost every foreign country increased its U.S. bond holdings in December 2012.

And now realize they are making a loss on that purchase as yields went up.

Chart 1: China U.S. Treasury Holdings

Read More

December 2012 China Gold Imports Hit Record Level

As predicted here, China bought gold like there was no tomorrow in December 2012 as gold prices fell to a record low. They bought 114.4 tonnes. I believe January will be a good month too.

Chart 1: China Gold Imports from Hong Kong

Net imports were 84.7 tonnes. That's 84.7/114.4 = 74%. That's a record high, even higher than the 68% in November 2012. This means China isn't even trying to export its gold to Hong Kong anymore. It's scooping up all the gold they produce!

I say: "Follow the money!"

Read More

Chinese Silver Imports

I finally found some data on Chinese silver imports through the Silver Investment Conference here. You will have to register for free there. Some interesting keynote speakers I like are Eric Sprott, David Morgan, James Turk. You can watch them today live.

Apparently the Chinese have been net buyers of silver, just as they have been becoming net buyers of gold (Chart 1).

Chart 1: Chinese Silver Imports through Hong Kong

Read More

China keeps buying U.S. Treasuries

I had expected that China wouldn't buy as much U.S. treasuries in November 2012 because they bought a lot of gold (62 tonnes or $3.2 billion). But they did increase their U.S. treasuries by $200 million to $1.17 trillion.

Though, I think that China hasn't bought a lot of treasuries in December 2012 as yields were rising that month. But no worries, Japan is going to buy all the leftovers from China. Japan is almost overtaking China with its $1.133 trillion in U.S. treasuries, supposedly to devalue the yen to increase exports.

Chart 1: China U.S. treasury holdings

Read More

Copper Contango Keeps Steepening

There doesn't seem to come an end to it. The copper contango keeps steepening to 2.5% for 1 year futures, while the copper price remains steady.

If all goes as planned, we will see a huge copper and stock market rally in the future. Probably helped by good Chinese numbers. China's trade surplus surged 48% in 2012, its exports jumped 14% and its non-manufacturing PMI rises to a new high of 56.1. China has even so much money left over to double its gold purchases in November 2012.

If China does well, commodities will do well. The only asset that will underperform is U.S. bonds. Just recently, China's sovereign wealth fund had even opted to back off in buying U.S. treasuries and putting more into stocks and real assets.

Chart 1: Copper Contango Vs. Price

I would recommend people to continue buying gold, or rather: platinum. I predicted that platinum would surge against gold and it has come to fruition. Platinum has now reached parity with gold and I forecast that we will continue to go higher in platinum against gold until the historic platinum to gold ratio of 1.2 has been reached. The main catalyst is a 7% global platinum production cut recently announced by Anglo American Platinum.

Chart 2: Platinum to Gold Ratio

Read More

China is buying gold on discount for Christmas Solden

We have very good numbers on gold buying from China out today. Gross gold imports doubled in a month time to 91 tonnes and the reason is of course lower gold prices in November 2012. The Western manipulators are shooting themselves in the foot by manipulating gold, because this way China can increase its holdings at a much faster pace.

Chart 1: China Gold Imports from Hong Kong

But let's look at the net imports too, because gross imports don't tell anything.

Net imports were 62 tonnes in November 2012, up from 24 tonnes in October 2012. That's 62/91 = 68% of gold that China bought, excluding gold going from China back to Hong Kong. That's an increase from the previous month October 2012 where the percentage was only 50%.

So that means, China is buying with both hands now. I wonder what will happen in December, as the price of gold got crushed in December 2012. Probably even more buying!

Read More

2013: The Rise of Asia

We just had news yesterday that China's PMI went positive to 50.6, even by the standards of HSBC. This means that the GDP growth per year of China is going to increase. It is estimated that China will have a GDP growth above 8% in 2013.

I think that's going to be a certainty. We can already see that base metal prices are rising as I pointed out the correlation between China PMI and base metal prices in this article.

I believe the copper price is in break out mode (Chart 1).

Chart 1: Copper Price

The iron ore price is increasing again after one year of downtrending(Chart 2).

Chart 2: Iron Ore Price

Shanghai real estate prices are soaring to new one year highs (Chart 3).

Chart 3: Shanghai Real Estate

Even the Shanghai Composite has made a big shift upwards after a multi year decline (Chart 4).

Chart 4: Shanghai Composite

And all of this is because the U.S. is in big trouble due to the unsterilized buying of bonds through plain money creation out of thin air and expansion of the federal reserve balance sheet. This unsterilized buying is the most inflationary action the federal reserve can take. It is even more inflationary than the ECB's sterilized Outright Monetary Transactions (O.M.T.) buying of European bonds. That is because the money supply doesn't increase when you perform sterilized buying, while unsterilized buying increases the money supply. Then we have the fiscal cliff which will be an enormous burden on the middle class citizens in the U.S. It is estimated that the 3% GDP growth will at least slow down to 1% due to the fiscal cliff situation. And don't forget the debt ceiling, which is already taking its toll on government workers in the Pentagon.

This is why the money is flowing to other assets in this world (Asia) and even into the euro right now.

We need to acknowledge that the U.S. doesn't have any bullets left at this moment...

Read More

Silver Prices Decouple Between Asia and Western World

Andrew Maguire on King World News reveals a shocking truth about the dislocation of silver prices between Asia and London. I already warned in February 2012 that prices between Asia and the Western world would diverge from each other and that manipulation of prices in the U.S. and London will end because of the emergence of Asia and their Shanghai Metals Market, which just recently started trading in silver (in April 2012).

Now, finally, the decoupling is happening and this should be an eye opener for everyone.

Apparently, silver traded at $29.61/ounce in London, while it traded at $32.50/ounce in Shanghai. That's a premium of 10% over London Spot Price. When the market closed it still traded at around 4% premium.

Of course there could be price disruptions between the two markets because of domestic spot trading. But 10% is a bit over it. Ultimately it's Shanghai that will win, because their exchange is backed by the real thing, while the COMEX is backed by nothing.

I would like to monitor this premium, but I can't find live quotes anywhere on the internet (which are free of charge). If I could monitor this premium divergence, it could be a tool to predict if the price of silver will go up or down.

Read More

China U.S. Treasury Holdings Steady

Nothing spectacular to report in the Chinese buying of the U.S. treasury market.

In October 2012, China's holdings rose $7.9 billion.

Chart 1: China U.S. Treasury Holdings

Read More

The Trend in Base Metals based on Capacity Utilization and China Manufacturing PMI

To forecast the trend in the price of base metals we have a lot of indicators to look at. Two of the most important indicators to look at in my perspective are capacity utilization and the China manufacturing PMI.

Previously, I noticed that capacity utilization for mining in the U.S. was improving in November 2012, with the rate growing to 91.1%. Though, the problem is that the U.S. isn't that important anymore when talking about commodities. For example, in 2012 the emerging markets account for 75% of global iron ore consumption (Chart 1), while Asia, South America and Oceania account for more than 70% of global iron ore production (Chart 2). The same trend can be found in gold and silver production/consumption.

Chart 1: Iron Ore Consumption by Continent

Chart 2: Iron Ore Production by Continent

It would be wrong to only look at the capacity utilization of the U.S. to draw any conclusions on the prospects in the commodity market. It's essential to include China, South America and Australia/Canada into the equation.

To read the analysis, go here.

Read More