Archive for December, 2013


Friday, December 20th, 2013

China’s government is likely the one behind the significant increase in gold imports that has made the country become the world’s second-largest consumer of the precious metal after India, reports Financial Times (subs. required).


Demand for the yellow metal in China has experimented a solid growth over the past four years to the point analysts predict the nation’s gold demand will beat supply by 2015, making it the world’s largest buyer by year-end.

China is already the world’s biggest gold producer and it has been so since 2007, with an annul output of 403 tons in 2012, a year-on-year growth of almost 12%.

The question is, says Evy Hambro —chief investment officer of BlackRock’s natural resources equity team, where all that gold is going.

“Is it going on to wrists, ears and necks or is it going into state reserves?,” he was quoted as saying in the interview with FT.

The Chinese government’s does not publish any gold trade data. The numbers from Hong Kong, a major conduit for gold into the mainland, are used to obtain a realistic estimation of the country’s trade in the precious metal.

China’s government likely behind country’s gold hoard—report

Table from Zero Hedge.

And those figures aren’t minor. Imports from Hong Kong climbed to the second-highest level on record in October, as the country bought more than 100 tonnes of gold for a sixth straight month. For the first ten months of the year, imports totalled about 986 tonnes, more than double from a year-ago period.

The last official figure on record, provided by the People’s Bank of China in 2009, show the country’s bullion reserves standing at 1,054 tonnes. But based on global trade data, some analysts suspects China’s central bank has bought up to 300 tonnes of gold this year.

“I think we will need some clarity and that will really set the tone for gold in China in 2014,” Hambro told FT. ”If it does start to show that some of it has gone into state hands that will be very supportive for the gold market.”

Backing is really what the gold market seems to need. This year, the shiny yellow metal dropped 25% and is steadily heading for the first annual drop since 2000. Quite a few investors lost faith in gold as a store of value amid a rally in U.S. equities to a record and muted inflation.

Meanwhile, China has been easing rules this year regarding gold trade and investment. Other than ETF approvals, it has extended trading hours on its bullion exchange and introduced a draft plan to allow more banks to import the precious metal.


Henry Sapiecha

gold bar line


Thursday, December 5th, 2013

Police in Papua New Guinea say at least three miners have been killed after a disturbance at the Porgera gold mine site in Enga province.

porgera gold mine in png image

They say the trouble started when a mobile police squad was deployed to the mine to investigate the deaths of two illegal miners who fell into a pit.

PNG’s Deputy Commissioner of Police Operations Simon Kauba says a confrontation took place when officers arrived.

“There was this confrontation from the illegal miners, those who were with those two who were deceased, and so they were dispersing them, and in the process may have been hurt, and later we found out one or two other people died from the confrontation,” he said.

Mr Kauba says extra police have been sent to the mine, which remains temporarily closed.

“[The] situation is not looking good but it is brought under control,” he said.

“We are sending in extra reinforcements so that we can allow the normal situation to come back and also allow the mine to operate at the normal rate.”

Barrick Niugini Limited, the Canadian company that owns the mine, says “no security staff were reported to have taken part in the incident resulting in the fatality.”

In separate incidents two mine personnel were attacked and injured by groups of illegal miners, Barrick said in a statement.

Spokesman Greg Walker says the company had earlier asked for police help to remove illegal miners who were massing in large numbers at the mine’s open pit area.

The company says it is investigating the incident and its causes.


Henry Sapiecha

gold bar line