China’s net gold imports via Hong Kong rose about 17% month-on-month in July, the first time since March.
China imported 25.659 tonnes of gold in July, up from 21.919 tonnes in June, according to the Hong Kong Census and Statistics Department. Total gold imports via Hong Kong rose more than 6% to 31.457 tonnes. China is a leading consumer of bullion, and its purchasing patterns can influence global prices.
China’s central bank suspended gold purchases in May and did not buy any gold for its reserves until August. However, several Chinese banks have received new gold import quotas from the central bank, expecting demand to pick up despite record high prices. The quotas help the People’s Bank of China (PBOC) control the volume of bullion entering the country. Weakness in jewellery demand is weighing on the Chinese mainland amid uncertainty around discretionary spending, but at a retail investment level, interest in coins and bars is relatively resilient, experts say.
“I think the uptick in imports is just a knee-jerk reaction by some positioned players in the Chinese banking sector, who continue to buy some metal internationally,” says independent analyst Ross Norman. Since gold is also imported via Shanghai and Beijing, Hong Kong data may not give a full picture of Chinese purchases.
Industry officials expect Chinese gold demand to increase in the coming months as consumers adjust to higher prices. Economic uncertainty and concerns about currency weakness are expected to support investment flows.
Spot gold has risen more than 21% this year, reaching an all-time high of $2,531.60 an ounce last week.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
