Archive for Chinese Gold & Silver

China hints of gold use in new free trade zones and along Silk Road

Examiner.com

On April 29, China’s Gold Association laid down some of the firmest hints that in the future, gold will be used as a primary form of money in the myriad of free trade zones and along the new Silk Road that they are constructing through the Far East and Central Asia. And in a report issued on Wednesday regarding expected gold consumption for the 4.4 billion people living within the 65 countries along the designated trade route, the accumulation of gold as both money and wealth protection has caused Eastern and Eurasian countries to purchase the metal in record amounts, and pave the way for a more secure form of trade currency after decades of using devaluing fiat scripts.

Additionally, as the center of power over the global financial system shifts from the West to the East, China and their fellow BRICS partners believe economic stability rests in a combination of free trade, and through the use of gold or other resource backed money.

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Chinese media: “We are the Gold Consumption Super-Power.” Chinese citizens now holding over 6,000 tons

Dan Collins
CMR

– China officially imported over 1,500 tons in 2013 with some estimates
as high as 2,200 tons. This is in addition to the 400 tons they produce
annually which is never leaving the Mainland.

– China has now declared that its citizens are privately holding more
than 6,000 tons of Gold turning China into the “Gold Consumption Super-Power”

– China will not release their Gold holdings as they want gold prices
to stay low. Acquiring gold is all part of China’s master plan which the
Chinese press refer to as “Secret Gold Holding Logic” to make Shanghai
the world’s financial centre with the RMB as its central currency.

As most informed individuals know, Gold has been dropping like a rock from
its previous highs of over $1900 an ounce. This has only encouraged more
buying from China, in paticular the fictional character called “Auntie Want”
which represents all of those middle-aged Chinese women with money to burn
that love buying real assets like houses and are gold are now being blamed
for buying over 200 tons in only a few months during the summer when prices
hit lows around $1,250.

Last year, in 2013, China took advantage of falling prices to import more
than $1,500 tons of Gold. This is in addition to the 400 tons they produce
annually which is never leaving the Mainland.

What has people really talking in China is why the government will not
release their holdings in the People’s Bank of China (PBoC).The last time
China released their official holdings was 2009 when they shocked the markets
by showing a massive increase in reserves to 1,054 tons. They have always
promised to release their official holdings numbers every five years. Those
of us that watch China and Gold closely have seen the PBoC’s Gold release
data dates come and go with no release of the banks holdings.
Chinese financial commentators are saying that this is because the PBoC would
spook markets showing that their holdings are now up near 5,000 tons.
This is the last thing the PBoC wants to do as they plan to buy more and
they want to buy as low as possible.

The Shanghai Gold Exchange is now the world’s largest physical bullion
market in the world and all part of the plan. They are set up in Shanghai’s
free trade zone and are opening up gold holdings to foreign investors who
want to keep bullion in China. The Gold contracts are of course priced in
Chinese Yuan. Shanghai has also recently opened a new vault with a
2,000 tons capacity to back up Shanghai’s bid to hold and control global
pricing of the commodity.

While traders in Chicago on the COMEX sit and trade each other paper
contracts all day with neither one actually owning any of the commodity
they are training, the traders in Shanghai will be well-at-ease to know
the physical bullion is actually there.

China’s continuing grip on the global gold market is all part of the plan
according to analysts in the Chinese media. Literally translated it is called
the “Secret Gold Holding Logic”. China needs Shanghai to become a global
financial center. It will surly become one as the RMB goes global, and China
will have the gold reserves to partially back the RMB with a hard asset.
This is the long term plan according to some state media sources in China.

There are some Gold holdings in China which are not secret. Recent numbers have
been released estimating that the Chinese population themselves are now holding
over 6,000 tons of Gold. China has long been trying to get its citizens to invest
in Gold. In fact going back to 2004, the PBoC governor, Zhou Xiaochuan, was nicknamed
“Golds best salesman in the media. The result is today, in China’s Big 5 banks you
can hold gold accounts both paper and physical as well as visiting their “GOLD VIP”
centres to purchase physical bars.

With China now importing more than 1,500 tons annually and the consumers holding
more than 6,0000 tons one commentator in the financial press refereed to China has
the “New Gold Consumption Super-Power”

goldcore_bloomberg_chart4_11-09-14

Gold at $7,000 article goes viral in Chinese media

Dan Collins
CMR

“Gold going to $7,000”, an article today in the Chinese media is
going viral and one of the most viewed articles in the financial
press. The article references American Jim Rickards and his concept
of comparing inflation-adjusted gold prices. Most Chinese economists
think that the price of gold should be approximately $ 2,400 / ounce,
instead of the current $ 1,235.

The article references estimates by Jim Rickard’s that if Central banks
had to to use gold to support its currency, then the price of gold will
go to $ 7,000/ oz. That only includes the printing that has been done
already, not the continuous printing of fiat currency that continues
unabated by Central banks all over the world.

Todays volatile financial markets are a warning that todays assets have
no actual real underpinning. There is no insurance. Gold stands as the
bulwark.

Although the U.S. Dollar is the reserve currency of the world today,
gold is the key to the new millennium of global trade balances.

The Dollar is losing its reserve status, holdings by Central Banks have
been going down for decades. Meanwhile, Chinese RMB holdings are
skyrocketing across the globe. The U.S. has been running trade deficits
for 30 years, when the Dollars start to go back onshore their will be a
global puke of the financial system and inflation levels the U.S. has not
seen in its entire history.

Are you ready?

panda-gold-25-jan-2011

China Importing Gold Secretly Using the Military

JIM RICKARDS: CHINA IS IMPORTING GOLD SECRETLY USING
MILITARY CHANNELS

The Inteligencia Financiera Global blog
(Global Financial Intelligence Blog) is honored to present
an exclusive interview with economy world expert Jim
Rickards. Jim is the author of the bestseller “Currency Wars:
The Making of the Next Global Crisis” and the forthcoming,
“The Death of Money: The Coming Collapse of the International
Monetary System”.

He is a portfolio manager at West Shore Group and a partner
in Tangent Capital Partners, a merchant bank based in New
York. He is an advisor on capital markets to the U.S.
intelligence community and the Office of the Secretary of
Defense.

Thanks for accepting this interview.

Jim, as you know, China is now the world’s largest consumer
of gold. While the WGC states that its “record” demand in
2013 was only 1,065.8 tonnes, the China Gold Association
estimates “gold consumption” was 1,176 tonnes. On the other
hand, several pundits like Koos Jansen say that the real
China gold demand was much more than 2,000 tonnes last year.
Who should we believe?

– There are many estimates of official and non-official
accumulation of gold in China. The truth is that no one knows
the exact number because China is non-transparent about the
total amount of gold coming into the country and its own mining
output, and it is not-transparent about how much of that gold
goes for personal acquisition and now much to government
reserves. So, all analysts, myself included, are working with
imperfect or incomplete information.

We do know that some gold comes into China using military
channels and is not reported to any authority. As a result,
even the best estimates may be too low. The best guide is to
assume China has some target in mind, probably 5,000 tonnes or
higher, and will continue to accumulate through diverse channels
until that target is reached. My estimate is that China will
announce it has over 5,000 tonnes of gold in early 2015.
It probably has at least 3,000 tonnes today.

Why is China buying such big quantities of gold? Is Beijing
preparing for the collapse of the fiat monetary system? Do
they want to replace the USD with yuan as a reserve currency?

– China has no prospect for replacing the USD with the yuan as
a global reserve currency. This would require China to open its
capital account, which it does not want to do. It also requires
a good rule of law and a deep liquid bond market with financing
and hedging instruments, which it does not have. So, the yuan
will not be a reserve currency for at least ten years, possible
longer and the Chinese know this. The reason China is acquiring
gold is to hedge its exposure to dollars. China actually wants
a strong dollar because they own over $3 trillion in dollar
denominated paper they cannot dump. If the U.S. inflates and
devalues the dollar, gold will go much higher in price.
Whatever China loses on its paper due to dollar inflation,
it will make up on its gold profits. So, China is hedging
dollars with gold. Other investors should do likewise.

Gold is going from West to Far East, that’s a fact. It seems that
the “developed” economies are being left only with paper “gold”.
Could this lead to future war tensions between China and Russia
on one hand, and the US, Europe and Japan on the other?

– Gold is certainly moving quickly from vaults in the U.S. and
Europe to as those maintained by the COMEX and the GLD ETF, in
the direction of vaults in China including those of the
government. Much of this gold passes through Swiss refineries
where it is melted down from 400-ounce bars of 99.90% purity
and re-refined and recast into 1-kilo bars of 99.99% purity.
When gold moves from west to east, there is no change in the
total stock of gold, but there is a reduction in the floating
supply since COMEX and GLD gold is available for trading and
leasing whereas China’s official gold is not. This implies a
gradual unwinding of paper short positions in gold, because
there is less physical available to support the paper trading.
In turn, this supports a higher price for physical gold.
A higher price for gold means a low value for the dollar when
measured in gold. This will increase tensions
between China and the U.S. Tensions are already high between
China and Japan over the South China Sea islands, and between
the U.S.and Russia over Ukraine. Taken in combination, the
potential for a mistake or escalation resulting in actual warfare
prompted partly by increasing gold prices is growing more likely.

http://inteligenciafinancieraglobal.blogspot.mx/2014/03/jim-rickards-china-is-importing-gold.html

Wall Street Panicked by Chinese House Wives Gold Buying

An article surfaced today in China discussing a new player
in the gold market that has Wall Street running scared.

The new player is the Chinese housewife. This typical
Chinese housewife as described in the article is between
40 to 60 years old with investable assets of between
$10,000-$10 million dollars. This representative housewife
in addition to her assets also has what approaches zero
knowledge of investment knowledge.

The article goes on to give one example Of these “Mad
hunters of Gold” whom they call Auntie Kimmy. Auntie Kimmy
has purchased $2 million Yuan ($330,00 USD) worth of gold
over the last year. When asked if she was disappointed by
the decline in gold prices, Aunti Kimmy said, “Not at all,
..this gold is going to my children.”

It is this mentality that has Wall Street nervous. Quoted
in the article is State Council Development Research Center,
Institute for International Economics Visiting Researcher
Zhang Jie who was quoted as saying Wall Street and the Fed
should be very nervous. The business of loaning out based
on gold reserves is over as once the gold arrives in China,
it is never going back.

images

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Gold is on a one-way trip aboard the slow boat to China

Gold Flows East as Bars Recast for Chinese Defying Slump
Bloomberg

Gold’s biggest slump in three decades has been a boon for
MKS (Switzerland) SA’s PAMP refinery near the Italian border
in Castel San Pietro, whose bullion sales to China surged
to a record as demand rose for coins, bars and jewelry.

As prices plunged 28 percent in 2013, investors dumped a
record 869.1 metric tons from gold-backed funds traded
mostly in the U.S. and Europe. Much of that metal is ending
up in Asia, where companies such as The Brink’s (BCO) Co.,
UBS AG and Deutsche Bank AG are opening new vaults. China’s
expanding wealth has made the country the world’s largest
buyer, surpassing India, as imports reached an all-time high.

PAMP Managing Director Mehdi Barkhordar, who credited China’s
“insatiable” appetite for a sales boost of as much as 20 percent
last year, remains optimistic even as growth in the world’s
second-largest economy slows. “The demand in China is off its
peak, but still respectable,” he said last week.

To keep up with orders, MKS added shifts at the PAMP refinery,
located about 4 miles (6.4 kilometers) from the Italian border,
Barkhordar said in November as he showed off a 1-gram gold piece
the size of a fingernail. Furnaces that can process more than
450 tons a year were at full capacity from April to June,
melting mined metal, scrap jewelry and ingots at 1,000 degrees
Celsius (1,832 degrees Fahrenheit) into the higher purities and
smaller sizes favored by Asian buyers.

Brink’s, the largest provider of precious-metals logistics and
storage, is adding room on top of a vault the company opened in
2012 at the Singapore Freeport building next to Changi
International Airport, with a sleek, modernist lobby and a
twisting, polished-steel sculpture by Ron Arad that stands 5
meters high. Inside, the gold bars are protected by prison-
like barriers, two body scanners and 8-ton, fireproof gates.

http://http://www.bloomberg.com/news/2014-01-28/gold-flows-east-as-bars-recast-for-chinese-defying-slump.html

China: Gold price decline premeditated. U.S. has started a currency war

China National Gold Group Corporation, General Manager Sun
Zhaoxue has come out and told the world media that the
U.S. is suppressing the gold price. The reason for America’s
manipulation of gold is to ensure U.S. Dollar dominance on
the world stage. America has by default ended up with the
world’s reserve currency and therefore , get the world to work
for them in exchange for an ever increasing supply of printed
greenbacks. He also went on with an excellent analysis on of
America’s war against Europe and the Euro using their investment
banks. Another good insight from Sun Zhaoxue is that while
major players like Warren Buffet and Goldman Sachs talk about
how they hate gold and forecast price declines they have made
large bets on gold and gold companies.

His comments from the Liujiazui economic forum were as follows:

“The hottest topic at the moment is oil and gold. The ground war
we are seeing around the world is I think war for oil whereas gold
is the currency war. Why? We observe that the integrity was the
driver for US Dollar to become world reserve currency. The US Dollar
and gold decoupling from 1971 caused the US Dollar to depreciate
massively. From 1990 onwards, the Eurozone was in consultation to
form a strong Euro to counter the US Dollar, in order to prevent
the latter from stripping Europe of its wealth. The Euro was born
in 1999, supported by its strong economy and 11,000 tons of gold.

With the birth of the Euro a competitor to the US Dollar was
created, and so the US decided to lay a trap for the Eurozone as
part of the currency war. Some countries in the Eurozone violated
the Eurozone’s norms by issuing bonds. Which entities participated
in the issuance? US investment banks. After the debt was issued, it
was US ratings agencies that struck a blow to the Eurozone by saying
that its economies had problems.

Only gold remains on par with the US Dollar to benefit from the
Eurozone and Euros collapse. This is why the US began to suppress gold
by issuing a statement two months ago that the Eurozone will sell its
gold when it is unable to service its debt, then stating three days
later that the news was false. Furthermore Goldman Sachs made a
forecast for the gold price at the beginning of the year but suddenly
changed its course saying the gold price will fall to $1300. Buffet said
that he would not buy gold even if its price fell to 800USD. Our research
indicates that Buffet made a lot of money from four gold companies.
So his statement is inconsistent with his personal action.

Bernanke’s speech followed, saying that monetary easing will end, that
the US economy is improving. This series of examples shows that the
fall of the gold price is premeditated. So I say that this process
is a genuine currency war.

Many people say that gold is just a beautiful thing. Then we have to
ask the US why they store so much gold but instead of selling gold,
they issue debt to other countries to rescue the financial market.

The US owes Germany so much gold but instead of repaying immediately,
sets a 2020 deadline to return the gold. From this example and process
as well as some typical factors, this is a downright currency war to
maintain US Dollar hegemony by defeating all other currencies.

I shall stop here.

china_gold-300x250

Behind the gold-buying rush of Chinese ‘mother investors’

The recent talk about the so-called duel in the gold market between
Chinese “mother investors” and Wall Street investors, which resulted
in the dramatic rise and fall of gold prices, actually reflects
different investment views and growing risks in the financial market.

Gold prices dropped for seven consecutive sessions last week to a
nearly two-year low of US$1,370 per ounce, following the continuing
plunge since mid-April from the US$1,600 level. The gold buyers in
China and the sellers, mainly Wall Street investors, represent
long-term and short-term investment views, respectively.

In China and India, gold is considered the traditional safe haven
for long-term investment and buyers are more likely to pass it to
their children rather than sell it. However, Wall Street investors,
several of whom have been bearish about the precious metal and sold
large amounts of it during the first three months of this year, are
possibly trying to push down gold prices and buy it back to make a
quick profit.

Gold buying by investors in the East perhaps reflects their distrust
of paper currencies, since the quantitative monetary easing measures
introduced by central banks in the Western world since 2008 have
distorted long-term economic trends. With the global financial market
and the value of the US dollar and the euro becoming more unpredictable,
gold, in comparison, is a commodity that can maintain a certain value
in the long term. In addition, there have been growing media reports
about the current stock market rally being called baseless, including
a Financial Times article pointing out that “the behavior of credit
and equity markets has moved into the opposite direction from fundamentals.”
Such a development indicated growing risks in the market, especially
when stocks continue to soar, and these potential risks could provide
strong support to the bullish views on gold.

Busted: Woman caught smuggling 3kg of gold in her bra in Shenzhen

Want China Times
As international gold prices plunge again, a number of people have
been caught trying to smuggle gold from Hong Kong into mainland China.
One woman was caught on May 10 with three kilos of gold bars hidden
in her bra at the Shatoujiao customs on the border at Shenzhen.

Many mainlanders rushed to Hong Kong to buy gold after international
prices tumbled to US$1,321 per ounce on April 12. Gold prices have
declined again since May 10 following a brief rise and closed at
US$1,374.90 per ounce on May 17, according to the state-run China
News Service.

The woman who was stopped at Shatoujiao, surnamed Yu, had placed
three .999 kg bars of gold bullion in her bra. Staff members found
her body movements and facial expression suspicious and asked her
to go through a metal detector, followed by a physical check which
uncovered the bars. A maximum of 50g of gold may be carried through
Hong Kong customs.

Customs officials have stepped up inspections amid a spate of
similar smuggling attempts. A Hong Kong man was discovered trying
to pass through customs at the Luohu border crossing with 4kg of
gold bullion hidden in his shoes on May 8. In other cases, gold was
found sewn into the hem of skirts.

Gold-hungry China braces for surge in imports

(Reuters) – Chinese gold imports are likely to swell further after rising
strongly for a second straight month in March, as investors seek safety
from economic uncertainty and after prices plunged to a two-year low
last month. “Physical demand picked up significantly over the last couple
of weeks. Consumers and industrial users tend to see price drops as buying
opportunities,” Zhang Bingnan, secretary-general of the China Gold
Association, told Reuters. “Investment demand should continue to stay strong
through the rest of the year because of limited investment alternatives,”
said Zhang, adding that gold sales and processing volumes both spiked in April.

He said China’s gold consumption in the first quarter probably rose 10-15
percent from 255.2 tonnes in 2012. Net gold flows from Hong Kong to China,
the world’s No. 2 gold consumer after India, rose to 223.519 tonnes in March
from 97.106 tonnes in February, data from the Hong Kong Census and
Statistics Department showed on Tuesday (www.censtatd.gov).

In March, Shanghai gold futures fetched premiums of more than $30 to global
prices, making it cheaper to buy the metal overseas. April could see imports
swell further after the drop in international prices spurred frenzied buying
in Asia, leading to a shortage of gold bars and coins in Singapore as well
as Hong Kong, which is China’s main source for gold imports.

Demand for gold from India and China is a major factor in global prices, with
the World Gold Council saying the two countries account for more than a third
of global appetite. China produced 403 tonnes of gold in 2012, but consumption
was more than double at 832.2 tonnes.

Gold tumbled to around $1,321 an ounce on April 16, its lowest in more than
two years, after a fall below $1,500 and fears of central bank sales led to
a sell-off that stunned investors and prompted them to slash holdings of
exchange-traded funds. It stood at around $1,460 on Tuesday.

“April imports will be stronger than March,” said Ronald Leung, chief dealer
at Lee Cheong Gold Dealers in Hong Kong. “The world was buying gold and China
was no different at all.”

HEAVY TRAFFIC

The drop in gold prices has prompted a gold rush in China, with Chinese
shoppers flocking to retailers to buy jewellery and gold bars.
A spokesman for Hong Kong jewellery chain Chow Tai Fook (1929.HK), the world’s
largest jewellery retailer by market value, told Reuters that traffic at its
China stores jumped by 50 percent during the May Day holidays.
The surge in Chinese travellers during the three-day May Day holiday also
drove gold sales in Hong Kong to rise by an estimated 50 percent, with total
gold sales from April 29-May 2 reaching some 40 tonnes, local media quoted
Haywood Cheung, president of the Hong Kong Gold and Silver Exchange, as saying.

The jump in Chinese physical demand also prompted some banks to ship in more
supplies from London and Swiss vaults, traders said with China’s economy still
on shaky ground, investors could increasingly be turning to gold as a so-called
safe-haven investment. China’s annual export growth may have picked up slightly
in April due to a low comparison from a year ago, while import growth probably
eased, a Reuters poll showed, suggesting the underlying momentum for both the
domestic and global economies remains tepid.

Gold exports to China from Hong Kong hit an all time high of 557.478 tonnes in 2012.

(Additinal reporting by Manolo Serapio Jr; Editing by Joseph Radford)

Guangzhou store front grins with 300kg of gold teeth

Nearly 300 kilograms in gold bars caught the glare of the sun — and
the eye of shoppers — as the yellow brick road leading the way to a
jewelry store in Guangzhou. The store was laying its intentions bare
for the Labor Day holiday, Chinese media reported.

The building authorities used 252 gold bars, each 1 kilogram, to pave
the front of the building for almost 5 meters. Dozens of gold ingots,
each weighing 10kg, were also displayed on the fourth floor of the
building. The building’s initiative was widely criticized as a grand
waste. The Guangzhou jewelry was apparently not alone in its decadent
decor. A jewelry store in Shandong also went with the gold standard,
going with 1,000 bricks of gold, each 1 kg, for its store front display.

Both buildings assured critics of adequate security when asked about
the safety of broadcasting their bling. The stores were apparently
bringing attention to the all-time low price of gold on the world market.

Golden Week becomes gold-buying week in Hong Kong

Want China Times

Tourists from the mainland flooded into Hong Kong to turn the May 1
Golden Week holiday into gold-buying week. Investors kept up their
gold-buying craze which began after international prices tumbled
on April 12, Hong Kong’s Wen Wei Po reports

Hong Kong gold retailers have reported seven-fold surges in their
business over the past month, and demand grew some 30%-40% on the
eve of the recent holiday, with one mainland buyer reportedly
buying one Chinese jin, or 500 grams of gold, for HK$200,000
(US$26,000).

While prices have rebounded recently after the mid-April tumble,
they are still markedly lower than the pre-drop levels, which have
fed into a continued gold-buying craze in Hong Kong. With the
addition of mainland tourists, stores in Hong Kong had people
lining up in the streets, the report said.

A clerk in Wing On Co in Wan Chai said he hasn’t seen a buying craze
like this in years, but the company prepared early for the holiday
weekend and was meeting buyers’ demand. The sale price of gold tumbled
to a low of HK$13,980 (US$1,800) per tael from HK$16,500 (US$2,125).
It recently rebounded to HK$15,750 (US$2,020) which is still cheaper
than the price before the collapse, he said. One tael equals
approximately 38 grams.

One man from Shenzhen took advantage of the holiday to buy gold in
Hong Kong and eventually spent HK$30,000 (US$3,900) on a gold chain
for himself, but couldn’t buy one for his wife because they were sold
out. Another man from Jilin didn’t buy anything because the style of
the remaining jewelry wasn’t to his liking, and prices had rebounded
enough that he lost much of his interest, he said.

China’s $3.3 Trillion FX Reserves Could Buy All World’s Gold Twice

Goldcore

China’s foreign currency reserves have surged more than 700% since
2004 and are now enough to buy every central bank’s official gold
supply — twice.

The Bloomberg CHART OF THE DAY shows how China’s foreign reserves
surpassed the value of all official bullion holdings in January 2004
and rose to $3.3 trillion at the end of 2012.

The price of gold has failed to keep pace with the surge in the value
of Chinese and global foreign exchange holdings. Gold has increased
just 263% from 2004 through to February 28, with the registered volume
little changed, according to data based on International Monetary Fund
and World Gold Council figures.

China’s Gold Consumption to be more than double the production of bullion by 2015

Considering China’s is the world’s largest gold producer…and their consumption
will be twice their production level what do you think that means for the price
of Gold? Gold 10,000…here we come.

From Shanghai Daily…

CHINA’S gold consumption will more than double the production of bullion by 2015,
the Ministry of Industry and Information Technology said. But China, the second-
biggest consumer in the world after India, will continue to see a wider deficit
in gold supply in the country as consumption is set to surpass 1,000 tons in 2015,
the ministry said in a statement published on its website yesterday.

Although consumption in India remained above China’s in the first three quarters
of the year, the World Gold Council predicts China to become the biggest market
this year, according to its quarterly report unveiled this month.
Since 2007, China has been the world’s biggest gold producer. It aims to produce
between 420 tons and 450 tons of gold in 2015. The country is also the biggest
old jewelry producer, taking up about 60 percent of the global production, according
to the ministry.

3 jailed for stealing silver bars worth 1.45m yuan

I had a discussion last night with a 20 year veteran of the materials market
who owns multiple scrap yards across Europe and Asia. I asked him in general
what he thought about the materials market. He said…at present prices have
been very stable for awhile which historically means it will trend down soon.

Of all the materials he likes… Silver. Why Silver? He mentioned that the amount
of industrial use of Silver is exploding. He sees this everyday in the real
physical materials markets.

From The Shanghai Daily….
THREE people who stole silver bars worth more than 1.45 million yuan (US$232,538)
from a local investment company were sentenced to 13 years to 14 years in prison
yesterday by the Putuo District People’s Court. Prosecutors said the main figure
in the theft, surnamed Hu, was a former security guard of the investment company
who planned the theft with two of his friends last December.

The company reported the theft to local police in February when it found eight boxes
of silver weighing 233.66 kilograms were missing. Hu was suspected of stealing the
silver after leaving the company in January. Duty records showed Hu changed his day
shift to the night shift with a colleague at the end of last year.

Hu told the court the theft idea occurred to him when he saw there was only a common
anti-theft lock on the door of the warehouse. He bought some locksmith tools and
asked two friends to help him. The three stole eight boxes of silver, each with 16
silver bars, and transferred them to southeast China’s Fujian Province, where they s
old some of the silver bars for 800,000 yuan. Five people who were involved in buying
and selling the silver bars were given sentences ranging from four months of detention
to three years in prison for concealing criminal income, the court ruled.

3%2Bjailed%2Bfor%2Bstealing%2Bsilver%2Bbars%2Bworth%2B145m%2Byuan

China’s Gold Lust

Nearly every talking head in the financial media will tell you about
the unlimited demand for U.S. Treasuries. What they don’t understand is
all of that incremental demand for U.S. debt is coming from the Federal
Reserve. China’s treasury holding have remained steady now for years and
have not increased. What are they buying instead?

China may raise the proportion of gold in its foreign reserves

Shanghai Daily

China may raise the proportion of gold in its foreign reserves as its
current low allocation can only increase, the London Bullion Market
Association said yesterday.

“When comparing China to the US, it would seem that in China, gold
asset allocation can only go in one direction,” David Gornall, chairman
of the London-based association of gold and silver bullion traders,
said at a conference in Hong Kong yesterday, according to Bloomberg News.
“The country has only 2 percent of its reserves in the form of gold
compared with the US at 75 percent.”

China’s gold reserves have stayed at 1,054 tons since 2009, and it is
ranked No. 6 in the world.

The US, Germany, Italy and France all maintain over 70 percent of their
foreign reserves in gold while China’s share is only 1.8 percent,
according to the World Gold Council’s data released this month.

China National Gold to Take Over African Barrick Gold

China National Gold to Take Over African Barrick Gold
中国黄金将收购巴里克
Oct 26, 2012 2:55 PM GMT+0800 | Source: 21st Century Business
Herald | Author: DENG Yao

People familiar with the matter disclosed that China National Gold
Group is undergoing the due diligence process to make a tender offer
for African Barrick Gold. The final takeover price has not been set
despite the previously rumored USD 3.9 billion.

The London-listed African Barrick Gold is 74 percent owned by the
world’s largest gold company, Canada’s Barrick Gold. The remaining
26 percent stake is tradable shares. As required by the London Stock
Exchange, the tradable shares must be sold along with the 74 percent
stake. Thus, China National Gold is expected to fully take over
African Barrick Gold.

It has been learned that China National Gold has submitted the
takeover plan to the National Development and Reform Commission and
the State-owned Assets Supervision and Administration Commission.
The authorities’ approval decision will highly depend on the price
quotation.

Suspicion over purity of gold bars sold by Chinese bank

Is this story real? I would say that Chinese banks will not knowingly have
fake gold bars on hand.However, with that being said, China is thee most
innovative copy cat market. Add in epidemic corruption and you could easily
see somehow fake gold bars getting inserted into the Banks supply chain
or perhaps even being swapped out by insiders at the bank.

From Want China Times….
Suspicion over purity of gold bars sold by Chinese bank

Beijing-based blogger, “Jason” Feng Xiaoque, has claimed on his microblog
that he has verified the impurity of gold bars sold by a well-known bank.
Feng also suggested in a different post 40% of the gold bars traded in the
Chinese market may be adulterated with iridium or tungsten.

Members of Gold and Jewelry Association of China’s coastal Jiangsu province
confirmed the authority previously found fake gold products in circulation,
but none recently in the province. The 40% claim is almost certainly an
exaggeration, reports the Yangtze Evening Post.

In the first of his microblog comments, Feng claimed “Someone with an XX
Bank 1kg gold bar with authenticity certification and receipt intended to
sell the gold to a gold and silver processing plant. The plant’s boss
brought it after verifying it was indeed sold by the XX Bank. However, a
week after he sent the gold bar to Nanjing for purity testing, he received
the analysis report revealing the gold was adulterated with iridium.”

The two posts immediately attracted online attention. One web user
questioned the veracity of Feng’s claims, stating: “I took gold bars I
purchased in China to Shanghai’s testing facility; they nearly crushed the
gold bars and the test results returned confirmed the bars are 100% pure.
I suspect your friend’s gold bar was switched by the testing plant’s boss
— I think the bank would not dare to do such a thing as adulteration.”

Another message circulated on the internet claimed the Chinese gold market
might have in circulation fake gold bars containing a tungsten core. The cost
of manufacturing a 400 ounce fake gold bar is only US$50,000, far lower than
the US$480,000 for a pure gold bar. If the gold price keeps rising markedly
international crime organizations would certainly have an incentive to
manufacture fake gold bars.

Even though it is the world’s largest gold exchange-traded fund, SPDR Funds,
points out in its prospectus that the SPDR Gold Fund can not guarantee
the gold in storage is completely pure.

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Neo-Alchemy: Scientists claim to be able to make 24-karat gold

Alchemy or the turning of a base metal into gold is a dream of man for
thousands of years. Even giants such as Newton spent decades on it.
As a product of biology, it seems feasible that at some point our science
would be strong enough to create gold. Has it finally happened?

A team of Michigan State University researchers have discovered a
bacterium that has the ability to withstand incredible amounts of
toxicity to create 24-karat gold. This process, known as microbial
alchemy, will help scientists turn a substance of no value into a
solid, precious metal.

The team was led by Kazem Kashefi, assistant professor of microbiology
and molecular genetics. Working along with Adam Brown, associate
professor of electronic art and intermedia, the team discovered that
the metal-tolerant bacteria Cupriavidus metallidurans can grow on
massive concentrations of gold chloride – or liquid gold, a toxic
chemical compound found in nature.

According to the research team, the bacteria is at least 25 times
stronger than previously reported. They also combined their research
with an art installation called “The Great Work of the Metal Lover”,
which uses a combination of biotechnology, art and alchemy to turn
liquid gold into 24-karat gold. The sculpture contains a portable
laboratory, a glass bioreactor and the bacteria, which produce gold
in front of an audience.

Brown and Kashefi fed the bacteria unprecedented amounts of gold
chloride and within a week the bacteria transformed the toxins into
a gold nugget. “This is neo-alchemy. Every part, every detail of
the project is a cross between modern microbiology and alchemy,”
Brown said. “Science tries to explain the phenomenological world.
As an artist, I’m trying to create a phenomenon. Art has the
ability to push scientific inquiry.”

It would be extremely expensive to duplicate the process on a larger
scale, so instead Brown said that the work should be used to “raise
questions about greed, economy and environmental impact, focusing
on the ethics related to science and the engineering of nature.”

“Art has the ability to probe and question the impact of science
in the world, and ‘The Great Work of the Metal Lover’ speaks directly
to the scientific preoccupation while trying to shape and bend
biology to our will within the postbiological age,” Brown said.

scientists-use-super-strong-bacteria-to-produce-24k-gold