The West Lost at Least Another 1000 Tonnes of Large Gold Bars in 2015
The comments above & below is an edited and abridged synopsis of an article by Ronan Manly
One interesting trend in the physical gold world is the ongoing conversion of 400-ounce gold bars into smaller 1-kilogram gold bars to meet the demand of Asian gold markets such as China and India.
It causes plenty of excitement in the gold world, as it underscores the huge movement of physical gold from west to east, and the continual depletion of gold inventories from locations such as the London Gold Market.
While the wider gold market acknowledges this trend, the established gold world and bullion banks tend to downplay it, presumably because it highlights the drain of physical gold out of the London vaults into China and India, gold that has little chance of ever returning.
While gold refineries in countries other than Switzerland may be involved in these 400-ounce to 1-kilogram gold bar transformations, the Swiss refineries are the big players in this area. The names in question are Valcambi, PAMP, Argor Heraeus and Metalor.
If you thought the massive conversion of large gold bars into kilogram bars that occurred in years such as 2013 and 2014 was an anomaly or a one-off, then think again. It also happened in 2015, and in a very big way.
Manly discusses 2015 gold refinery statistics, and 2015 UK-to-Switzerland gold exports. In a nutshell, the trend of raiding ETFs and borrowing central bank gold to send to Switzerland to convert into kilogram bars for the Asian markets is not sustainable.