There Is Great Uncertainty In The Global Gold Market.

The central bank increases gold reserves, on the one hand, to meet the demand for coins and reserves, and on the other hand, to improve its ability to intervene in the gold market.

The deeper involvement of the major commercial banks in the gold business will also make the central bank pay more attention to the financial attributes of gold. If there is not enough reserves, the central bank will not be able to have the "supply" and "recycling" capabilities in the gold market, so it is difficult for commercial banks and other financial institutions to form effective regulation in the gold market.

Not long ago, the Central Bank of China clearly stated that the purpose of gold holdings is to ensure liquidity.

However, compared with the international market, the openness of the gold market in China is still relatively low. In the US and European markets, although the central bank still has many gold reserves, the central bank itself has no longer interfered in gold consumption, trading and trading. If the gold business in commercial banks and financial institutions is not involved, the entire gold market has already been commercialized.

At present, China still has the phenomenon of "specialization" of gold, which has led to many obstacles to the participation and development of gold business by many non-governmental organizations and individuals.

In the gold market, the proportion of state-owned enterprises is too high, the industry is closed and conservative. In fact, it hinders the whole industry to move forward. As a potential industry with larger consumption potential and more innovation, it is in line with the trend of consumption upgrading. In the future, if China fails to make greater changes, the Chinese gold market will be subject to the international market for a long time, no matter from the market itself or from the perspective of financial pricing.

If there is no active market in the OTC market and gold spot commodity market, only by financial institutions and state-owned enterprises, the risks are too concentrated and the support for the whole market is not enough.

China's gold reserves at the end of 9 were 54 million 930 thousand ounces (or 1708.5 tons), 50 tons more than the 1658 tons announced in July 17th this year, and the average monthly gold reserves increased from July to September over 15 tons, which is basically the same as I expected (average 20 tons per month).

Theoretically speaking, as a kind of foreign exchange reserve and important international financial assets, gold is not a matter of great concern.

The current debate is whether there is a reasonable expectation or boundary for the purpose of gold holdings and speed and scale.

The market often misunderstands the central bank's holdings of gold. In fact, the central bank is not only the main holder of the gold market, but also the main "consumer" in the gold market. The increase in gold is often not for financial security, but for satisfying many stock and consumption demand, which is consistent with the increase of stocks in crude oil and other markets.

Before July 2015, the central bank's gold reserve data was basically in a "confidentiality" state. When to release the new gold reserve data, it depends entirely on the market's attention or the central bank's own ideas.

However, because China is facing a very difficult problem now, that is, the renminbi will strive to join the IMF special drawing rights (SDR), and with the acceleration of RMB internationalization, more international investors want to see more open and pparent central bank assets data. In fact, the Central Bank of China will open a lot of data in mid July, including new gold reserves.

Judging from the speed and scope of the central bank's increase in gold holdings, although the performance is relatively positive, the overall scale is still relatively cautious, and the proportion of the total foreign exchange reserves has not been very large.

From 2003 to 2009, the central bank's gold reserve increased from 600 tons to 1054 tons, increasing by 454 tons. If the average price of 600 US dollars per ounce was calculated at the same time, the total amount of gold spent by the Central Bank of China rose to less than 9 billion US dollars from 2003 to 2009, while foreign exchange reserves increased by 2 trillion US dollars during the same period.

From 2009 to 2015, the central bank's gold reserve increased from 1054 tons to 1708 tons (up to now), an increase of 654 tons, according to an average of 1300 US dollars in the same period, the total spent about 27 billion US dollars.

That is to say, from 2003 to 2015, China's central bank spent a total of less than $40 billion on gold holdings, and from 2003 to 2015, China's foreign exchange reserves increased by more than US $3 trillion, and the value of the increased gold reserves accounted for only 1.3% of the US dollar reserves.

There seems to be some changes in the current situation.

The central bank has not lowered its holdings of gold, but has continued to buy gold.

For example, from July 2015 to September, China's official dollar foreign exchange reserves decreased by 137 billion 200 million US dollars, while gold reserves increased by 50 tons over the same period, worth about 1 billion 800 million US dollars, accounting for 1.3% of the reduced foreign exchange reserves.

Therefore, the increase in gold reserves does not seem to have much to do with the increase or decrease in the US dollar's foreign exchange reserves. One of the main reasons is that the proportion of gold reserves held by the US dollar in foreign exchange reserves is too small.

Since 2008, China's dependence on gold imports has increased year by year.

China's gold imports in 2008 were only 112 tons. By 2013, this figure had turned to 1158 tons.

It is precisely because of the increase in China's imports, the global gold market has brought great uncertainty.

The United States, the most official gold reserve, has a huge supply gap. From 2012 to 2014, the US gold market supply was 1979 tons, while the total demand was 2415 tons, and the supply gap was 436 tons.

As a traditional gold consuming country, India's annual import volume is still over 800 tons, and the impact on the whole supply market can not be ignored.

Switzerland is the most important gold distributing market in Europe and the largest gold exporter in the world. In 2014, the country exported 1746 tons of gold, 12.2% of which went directly to mainland China and bypassed Hongkong.

Whether it is India's traditional demand or China's new demand, "

The phenomenon is very obvious.

In 2012, 2013 and 2014, it should be said that gold prices fell the most obvious three years. In these three years, the total price of gold fell by more than 30%. However, in the past three years, the demand for gold jewellery in China has reached 502.75 tons, 716 tons and 667 tons respectively. In the first half of 2015, jewelry consumption has exceeded 412 tons, and the consumption of gold in China's market has not declined due to the decline in international gold prices.

China's central bank only uses gold in the coin market, such as Panda Gold, and a total of more than 40 tons per year. The central bank needs more stock (reserves) to meet the gold consumption and financial needs of the future Chinese market.

At present, the demand for gold in the Chinese market, like demand for housing, crude oil, automobiles and grain, needs to go through a very distinct period of increase. It is only later than that of clothing, food and shelter. According to the international market data, the consumption demand for gold market is mainly started when the per capita GDP increased to more than 5000 US dollars per capita.

Another data from Bloomberg is that by the end of the two quarter of this year, the number of gold holdings of China's major banks increased by 55% in the first half of the year. The value of gold at that time was over 60 billion dollars, equivalent to more than 500 tons of gold holdings, with a total holding of 1445 tons.

According to Bloomberg's analysis, the main purpose of gold accumulation in China's major banks is to lend money on the basis of gold, so as to avoid the restrictions imposed by cash loans and balance sheet related loans.

Considering RMB

In terms of foreign exchange reserve security and gold currency attributes, the central bank's reserves of 1708 tons are too small at present. No matter whether it is used to intervene in the RMB exchange rate or to endorse the internationalization of RMB, it does not have any maneuverability.

Last year, in response to the collapse of the rouble, Russia's central bank also tried a lot of ways, including the use of gold to stabilize the ruble exchange rate, but with little success, it finally stabilized the rouble by relying on the Russian central bank to raise the rouble interest rate to 17%.

Therefore, when gold reserves can not reach an order of magnitude (in 1944, when the US dollar "Gold Exchange" standard and laid the world monetary hegemony, the Federal Reserve's gold reserves exceeded 20 thousand tons), for a giant economy like China, the yellow gold reserve within 5000 tons per kiloton could only meet the needs of inventory and consumption, and financial security could not be discussed.