August gold import figures for China were astounding, at 276 tonnes. This compares with January at 55 tonnes And all of 2012 at 558 tonnes.
Global mine supply is around 2400 tonnes and global consumption outside China of just under 3,000 a year. So total global consumption is now (if August figures continue) around 6,000 tonnes!
So Someone is drawing down their inventories big time. Some of this gold is from the large ETF in the USA, but I suspect a lot is from central banks trying to keep the price down.
The last time this happened was back in the 1960’s when the London gold pool sold physical gold to keep the price at $35 an ounce. When the pool collapsed the price shot up to $200 an ounce and eventually went to $800 an ounce in a decade of wild inflation, oil shocks and economic stagnation.
IF they are doing the same again, will the result be any different?
Have a great day