I am indebted to Koos Jansen (who else) of www.bullionstar.com for initially guiding us in the right direction, and to LawrieOnGold reader John Bentin and his Chinese speaking wife for interpreting the tables, in that, contrary to our previous assumptions, the Shanghai Gold Exchange (SGE) is still publishing SGE gold withdrawal data – but now only on a monthly, rather than a weekly, basis.  Thus for January 2016, some 225.1 tonnes were withdrawn from the Exchange, compared with 255.4 tonnes in the first month of the record 2015 year when full year deliveries reached 2,596.4 tonnes.  The amount is close to the 228.2 tonnes recorded in December last year, and ahead of November 2015 deliveries of 202.7 tonnes.  In January 2013, the previous record year for SGE deliveries, only 173.7 tonnes were delivered out of the SGE.

Given there can be quite substantial month-to-month fluctuations in withdrawals it is far too early to tell how 2016 will measure up to last year, but the figures do show that gold demand as represented by SGE withdrawals remains at a strong level – 56.3 tonnes  a week on average.  However it remains to be seen how the surge in the gold price over the past few weeks will affect February deliveries (which are anyway likely to be substantially lower due to the week-long Chinese New Year celebrations next week during which the SGE will be closed.)  We will really need to wait until March and April to see how 2016 deliveries are measuring up to previous years.

Even so, the January figures are quite encouraging in showing that gold demand has indeed been holding up pretty well so far.  Overall China and India, where gold imports of over 100 tonnes were recorded in November, look like remaining the key gold market drivers.  We are also seeing a pick up in a third key market, the U.S. where there have been strong gold ETF inflows year to date, and very strong demand for gold coins from the U.S. Mint.  With the gold price up 9% year to date the yellow metal is currently outperforming any other asset class.

(But, be warned.  Gold started off strongly in January 2015 too, also rising by around 9% in the first three weeks of the year.  But from then it was almost all downhill.  This year’s upturn is looking perhaps stronger and longer, and does seem to have more going for it than a year ago, but the price is still largely set by the COMEX paper gold market in New York where huge amounts of virtual metal are traded on a daily basis and there may well be other forces at play here which seem to ignore fundamentals.  Could this yet be déjà vu all over again!!)