Why is china buying gold

China and India typically account for some two fifths of the world's annual demand for gold. Their recovery is "critical in setting the floor for gold" and should stop prices from falling further over the coming months, said Suki Cooper, an analyst at Standard Chartered.

Jewellery sales in China during the Lunar New Year holiday in February were stronger than in and and manufacturers and retailers needed to replenish their stocks, said Philip Klapwijk at Precious Metals Insights, a consultancy in Hong Kong. Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox. All gold imports, domestically mined gold and recycled gold trade through the exchange. Th at edge helps the SGE platform become a force in global gold trading , Li adds.

According to Metal Focus, China mines China is also the global leader in using the yellow metal in jewelry fabrication, accounting for Investment demand for gold in China is also strong , Metal Focus notes. Investors in the Asian nation bought metric tons of physical gold, representing Since it consumes significantly more gold than it produces, China is a net-gold importer, and it imports the metal both through the mainland and through Hong Kong.

Now we are beyond the point of no return. GDP and is , U. Personal debt per citizen is another 60, U. Latin fiat means "let it be done": Governments only decree that an intrinsically valueless object is legal tender.

Good, trustworthy money needs limited supply. Precious metals were the money of choice for thousands of years. Paper fiat currencies are in unlimited supply if the government chooses, and thus can fail as a store of value; politically independent central banks should restrain governments which historically always lost discipline eventually. In , President Trump threatened to fire his own nominee as Federal Reserve Chairman, Jerome Powell, if he does not cut interest rates.

Countries around the world prepare for the time when the US dollar as the single reserve currency will end. Officially, they usually deny that gold is money. But in , the volume of gold bought by central banks rose to its highest level since the end of the partial gold standard Audits involve a lot of numbers — and too many numbers can get a little overwhelming, so I will try to keep them to a mentally-digestible minimum.

But let me start with perhaps the contextual figure and anchor that in your minds — US gold holdings. Official records show the US owns some 8, tonnes, most of it in Fort Knox. Since , China has mined roughly 6, tonnes. Already that official 1, figure looks doubtful. Crucially, China keeps the gold it mines —exporting of domestic mine production is not allowed. With reserves in decline at home, Chinese mining companies have also been buying assets abroad, across Africa, South America and Asia.

International production exceeded domestic production by about 15 tonnes last year. It is hard to get precise import figures, but we do know that, for example, via Hong Kong alone, over 6, tonnes has entered the country since Add that to cumulative gold production since and you get a figure of 13, tonnes. So SGE withdrawals — for which we do have numbers — can act as something of an approximation for demand.

And it is possible to get numbers for SGE withdrawals: since , roughly 20, tonnes have been withdrawn from the SGE. Then we have to add in gold held in China, whether as bullion or jewellery, prior to The World Gold Council estimates a figure of 2, tonnes in privately-held jewellery. If you add domestic mining and official reserves, you get a figure of around 4, tonnes. Nick Laird of goldchartsrus. In addition, there is gold entering China that is not accounted for by SGE withdrawals.