Another week’s gold withdrawal figures from the Shanghai Gold Exchange (SGE) and it appears that the demand momentum is holding up – if not accelerating. The latest figures are from the week ending August 14thwith the Exchange reporting flows of 65.3 tonnes out . This is an enormous figure for an August week when historically Chinese demand is usually at its lowest and follows several weeks of plus 50 tonne withdrawals at a time of year when 30 tonnes would normally be seen as a strong figure.

There are reports that demand has slowed over the past week given the recent recovery in the gold price, with Shanghai premiums falling accordingly, so the next week’s withdrawal figures will be viewed with additional interest to see if this really is the case, or whether Chinese overall ‘demand’, as expressed by SGE is still holding up well.

The latest figure for total SGE withdrawals for the year to date is now a massive 1,585 tonnes, fully 161 tonnes more than in the record 2013 year at the same time – seewww.sharelynx.comchart below. A quick calculation of SGE withdrawals to date (close to 50 tonnes a week so far this year), if extended over the full year would suggest a total figure for 2015 at over 2,500 tonnes – hugely higher than the record 2013 figure of 2,181 tonnes. While one should perhaps regard a continuing weekly withdrawal rate of 50 tonnes as being an optimistic projection, it is also worth bearing in mind that SGE withdrawals are usually far stronger in Q4 than in Q3!

With the Chinese Central Bank now reporting its own monthly gold accumulations – 19 tonnes in July and these apparently are additional to the SGE reported figures, and Russia continuing to expand its gold reserves – another 12 tonnes in July – and Indian imports rising sharply according to latest Swiss gold export data, global physical gold demand appears to be running well ahead of new mined supply, although whether that makes any difference at all in a paper-gold futures led market is perhaps doubtful. But with fear stalking the Dow after a huge week of falls (around 530 points on Friday alone), and general stock market indices around the globe a sea of red, maybe at last gold sentiment is beginning to get a safe-haven boost with worries about a general worldwide stock market meltdown.