uploads///Shanghai Gold Exchnage Yearly Withdrawals

Shanghai Gold Exchange Saw Record Withdrawals in 2015


Jan. 13 2016, Updated 11:47 a.m. ET

Chinese demand on a rise

What exactly constitutes gold demand in China remains a much-disputed topic. Specifically, the question remains whether it is best to use the import numbers for China or the withdrawals from its SGE (Shanghai Gold Exchange). India and China are the major demand sources for gold. A future surge in demand from these countries may provide some support for gold. However, the upcoming rate hikes from the Federal Reserve may weigh on gold. We’ll have to see which of these factors has a bigger impact on gold. In 2015, the looming rate hike was influential and pulled down gold prices almost 10% despite high demand.


Article continues below advertisement

Yearly withdrawal

In 2015, the SGE saw a record high of withdrawals of approximately 2,596 tons, which marginally fell short of analysts’ expectation of 2,600 tons. The 2015 figure surpassed the 2013 record high of 2,181 tons. In the final week of 2015, when the price of gold floated between $1,060 and $1,080 per ounce, the SGE witnessed a withdrawal of almost 41 tons.

A further surge in buying patterns during the coming year may provide support to the precious metals. A rise in the precious metals, especially gold, can positively affect the SPDR Gold Shares ETF (GLD) and the iShares Gold Trust (IAU).

Mining companies suffered a lot of carnage in 2015. A further fall in 2016 would negatively impact stocks like Kinross Gold Corporation (KGC), IAMGOLD Corporation (IAG), and Gold Fields (GFI). These three companies together make up 7.8% of the VanEck Vectors Gold Miners ETF (GDX).


More From Market Realist

  • Open sign on a sidewalk
    Macroeconomic Analysis
    Top Reopening Stocks to Play the Shifting Market Sentiment
  • Morgan Stanley sign and stock numbers
    Macroeconomic Analysis
    Morgan Stanley's Buyback Stock Picks in 2021
  • Black Wall Street sign is sign of ethical investing
    Macroeconomic Analysis
    Ethical Investing Stocks and Funds for Your 2021 Portfolio
  • New York City skyline and Goldman Sachs logo
    Macroeconomic Analysis
    Goldman Sachs: Options Trade Picks to Play Earnings Season Volatility
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.