Latest Swiss Gold Export Data Confirms China/Hong Kong Breakdown

Many Swiss gold exports continue to show key proportion of mainland Chinese gold imports are bypassing Hong Kong altogether.

Switzerland is the largest conduit for global gold exports with a number of refineries specialising in importing good delivery gold bars and other gold items, remelting and re-refining them and shipping them out again in the sizes more acceptable for the wholesale trade in gold bullion in the principal markets around the world. Last year, for example, Switzerland imported 1,755 tonnes of gold and re-refined this and re-exported 1,753 tonnes. The 10 countries listed below accounted for 90% of the Swiss gold exports.

Table 1. Top 10 recipients of Swiss gold exports in 2014

Source: Swiss Import/Export Data and www.sharelynx.com

From the above figures it is clear that China (if one takes the Hong Kong and Mainland China figures together) was the largest importer of gold from Switzerland last year accounting for around 34%, closely followed by India at 27%. Interestingly the figures also show that of the gold exports to Hong Kong and China, only 63% went directly to the former and 37% directly to the Chinese mainland, which goes a long way to proving our frequently expressed point that Hong Kong gold imports can no longer be seen as a proxy for the Chinese total figure – a factor which is frequently ignored by much of the mainstream media.

Of course, Switzerland is not the only source of Hong Kong and Chinese gold imports, but it is probably fair to assume that the Swiss breakdown will be similar to that for other countries, which export gold. There may well also be an ever increasing amount of directly imported gold from Chinese run mines operating overseas, hence our generally stated assumption that nowadays as much as 40% or more of Chinese gold imports are entering the country directly rather than via Hong Kong.

We now have access, courtesy of www.sharelynx.com, to the latest Swiss export data which show that in May this year, Hong Kong (36.4 tonnes) was the largest importer of Swiss gold, followed by India (24.7 tonnes) and Mainland China (18.8 tonnes), thus again showing that 34% of the combined Swiss gold exports to Hong Kong plus Mainland China went directly to the latter, bypassing Hong Kong altogether. These figures also suggest that overall Chinese demand remains relatively strong while Indian demand may be slipping ahead of the monsoon, although total exports to the three nations has fallen off somewhat compared with earlier in the year. These are normal seasonal variations. A chart showing the May Swiss gold export figures to the major importing nations is shown below.

The chart demonstrates that total Swiss gold exports for May came to 107.7 tonnes with 74% going to Hong Kong, China and India combined. Other major Asian and Middle Eastern nations accounted for a further 17%, again demonstrating the Eastern thirst for gold.

It should be noted though that there can be quite substantial variations month by month in the country-by-country breakdown of the Swiss gold exports, but always India, China and Hong Kong dominate hugely. In March this year, for example, a strong month for Swiss gold exports to Asia, fully 60% of the combined Hong Kong and China total of 75.94 tonnes went directly into Mainland China, again bypassing Hong Kong. Timings of deliveries are thus probably key here, but again the point is made even more strongly perhaps that analysts should no longer rely on Hong Kong export figures as indicative of total Chinese gold imports and demand.

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Courtesy of http://lawrieongold.com/