By: Mike Hammer
Most folks like to think gold flows into Switzerland, is made into gold bars, gets stacked in a hollowed-out mountain vault, and basically stays there. Ownership gets transferred around, but there’s a widespread belief that most gold sits in Switzerland. The next step up toward reality is when you add “and London, and New York“. A much more realistic view is when you also add “and China”.
The latest report of gold flows to and from Switzerland reinforce the more realistic view. In June Switzerland exported 117.57 tonnes of gold, which represents a big 23% drop from a year ago. The big change is that exports to China rose 59%, while exports to India dropped 27% year-to-year. This just highlights the ever-growing Chinese influence over the gold market, both in terms of retail sales (think jewelry and small bars) and central bank holdings.
The problem with Chinese gold, of course, is that China prohibits the export of gold, ensuring all yellow metal wealth stays in the country, strengthening their economic base over time. We talk about those ramifications for gold news more and more, it seems.
Today’s featured article gives the details on Swiss gold imports and exports, and gives you a peek at the Swiss language which is kind of fascinating by itself. What do you think – Is the rest of the world missing the boat on the increasing importance of China in the gold markets? Let’s hear what you think in the Comments below.