Gold Suppression Scheme: China’s Record Gold Purchases Came PRIOR to the Selloffs

One can smell wretched signs of manipulations from the actions in the physical real gold markets. 

From Bloomberg: (bold mine)

Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers in the biggest consumer after India boosted purchases, underscoring increased bullion demand in the world’s second-largest economy.

Mainland buyers purchased 223,519 kilograms (223.52 metric tons), including scrap, compared with 97,106 kilograms in February, according to data from the Hong Kong government yesterday. Net imports by the mainland, after deducting flows from China into Hong Kong, were 130,038 kilograms compared with 60,947 kilograms a month earlier, according to Bloomberg calculations.

The shipments preceded gold’s plunge into a bear market last month, with prices tumbling 14 percent in the two days through April 15 in the worst drop in three decades. The slump led to a surge in demand for jewelry, coins and bars from India and the U.S to China. Separate data yesterday showed China’s gold consumption rose 26 percent in the first quarter as prices fell.

More:

The purchases in March were more than three times higher than the 62,913 kilograms in the same month last year, according to the data from Hong Kong’s Census and Statistics Department. Mainland China doesn’t publish such data.

Exports of gold to Hong Kong from China were 93,481 kilograms in March, according to a separate Statistics Department statement, up from 36,159 kilograms in February, and compared with 32,484 kilograms in March 2012.

Volumes for the spot contract on the Shanghai exchange, China’s biggest cash bullion market, topped 323 tons between April 16 and May 3, according to data compiled by Bloomberg. Volumes reached a record 43,272 kilograms on April 22…

So again this report confirms that mainland Chinese buying of more than 10% of annual gold mining output over 2 weeks.

Even More

Retail gold sales tripled across China on April 15-16 after the rout, according to the China Gold Association. Zhang Bingnan, deputy head of the association, said on May 2 that there’s a shortage of gold jewelry inventory in the country after consumers bought up supplies and the industry is increasing raw-material purchases to ramp up production.

China’s gold consumption jumped 26 percent to 320.54 tons in the first three months from a year earlier, the association said yesterday. Consumption totaled 776.1 tons in 2012, down from 779.8 tons the previous year, according to the producer- funded World Gold Council. China and India account for more than half of global demand.

So if gold purchases from mainland Chinese were at a record pace even prior to flash crash, where they along with India constitute "more than half of the global demand", then why the crash at all? Because JP Morgan acted so.

Whatever the intent from Wall Street’s move, “shortage”, “more than doubled”, “three times”,  and “topped” certainly lead to the opposite outcome ("lead to a surge in demand") than what they expected. Instead of a panic out of gold, real physical markets panicked into gold. Talk about blowback.

Since gold cannot be printed, I’d like to see Wall Street empty their inventories or reserves, even if this means interim price pressures.

This should flush out whatever schemes being applied to gold and put into light actions as expressed by prices from the real gold markets, overtime.

Meanwhile mainstream media is having a buoyant moment in assailing gold bulls. They highlight on John Paulson’s hedge fund whose gold fund lost 27% last month. And gave weight to the dissing of gold from Warren Buffett, the supreme Obama crony. 

They peddle the idea that unsound money is sustainable. History tells us otherwise. And look at the bubbles going around the world.