Bloomberg News

China Gold Imports From Hong Kong Rebound on Decline in Prices

April 09, 2013

Gold imports by China from Hong Kong jumped 89 percent in February, rebounding from a decline the month before, as lower prices lured buyers seeking the metal for a protection of wealth.

Mainland buyers purchased 97,106 kilograms (97 metric tons), including scrap, from 51,303 kilograms in January, according to figures from the Hong Kong government yesterday. That’s the fourth highest monthly total on record, according to data compiled by Bloomberg. Net imports, after deducting flows from China into Hong Kong, were 60,947 kilograms, from 19,580 kilograms a month earlier, and the highest since December.

Gold retreated this year on speculation that the U.S. Federal Reserve may pare its stimulus as the recovery gains traction. Holdings in the SPDR Gold Trust (GLD:US), the biggest bullion- backed exchange-traded fund, have slumped 11 percent in 2013 as prices fell 5.3 percent. China was the largest consumer after India in 2012, according to the World Gold Council.

“The price decline in gold has attracted Chinese investors and jewelry buyers,” said Song Heping, assistant general manager at Xiamen City Commercial Bank Co. “Gold consumption in China will continue to rise this year as China’s recent moves to cool the property market and curbs on savings products have boosted investment demand for bullion.”

Bullion for immediate delivery traded at $1,586.07 an ounce at 9:35 a.m. in Singapore from $1,585.35 yesterday, when it rose to a one-week high of $1,590.46. While gold rallied for a 12th straight year in 2012 as central banks stepped up stimulus programs, it’s dropped 17 percent from its record close in 2011. In February, the metal lost 5.1 percent, the most since May.

Cooling Efforts

Mainland China, which doesn’t publish gold-trade data, increased curbs on the property market this year, with policy makers asking local governments to step up cooling efforts. The Hong Kong gold-trade figures are issued by the Census and Statistics Department.

Volumes for the benchmark cash contract on the Shanghai Gold Exchange reached a record 22,024 kilograms on Feb. 18, according to exchange data. From that day to the end of the month, they were more than double the daily average in 2012.

The imports in February compared with 39,668 kilograms a year earlier, the Hong Kong data showed. In 2012, shipments almost doubled to 834,502 kilograms from a year earlier, according to Bloomberg calculations.

Exports to Hong Kong from China were 36,159 kilograms in February, according to a separate Statistics Department statement, up from 31,723 kilograms in January, and compared with 8,701 kilograms in February 2012.

To contact Bloomberg News staff for this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Feiwen Rong in Beijing at frong2@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net; Brett Miller at bmiller30@bloomberg.net


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