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by Koos Jansen
In Gold We Trust
Much has been written lately about the influence of Chinese commodity financing deals (CCFD) on Chinese gold demand. An often perceived analysis is that CCFD have been inflating Chinese demand/import figures and thus balance the surplus of physical gold supply in China.
In 2013 the mainland net imported 1158 metric tonnes through Hong Kong, the Chinese do not disclose total net gold import, and domestic mining output was 428 tonnes. Without counting scrap supply and net gold import through other ports than Hong Kong, total supply was 1581 tonnes (according to me total supply was 2197 tonnes, as Shanghai Gold Exchange withdrawals equal total supply and demand, more on that later). Most institutions, like the World Gold Council (WGC), the China Gold Association (CGA), and GFMS state Chinese demand was lower than 1581 tonnes in 2013, forcing themselves to explain where the rest of the supply ended up. I disagree with their explanations that are often based on CCFD, also referred to as round tripping.
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