Chinese gold imports dropped for the third month in a row in April, according to new data released by the Hong Kong Census and Statistics Department. Net gold imports from Hong Kong amounted to 67,04 tonnes, the lowest volume in more than a year. The volume dropped by 21,2% compared to a month ago and by 11,6% compared to the same month of last year. In april 2013, net imports from Hong Kong were about 10 tonnes higher at approximately 77 tonnes.
A gold trader from Shanghai explained the development to the Economic Times of India: “Banks have adequate stocks from imports earlier in the year, and in some cases, even last year, that they are waiting to dispose of. Any new imports will have to wait until they clear the backlog”.
China imported less gold from Hong Kong in April
China is buying less gold?
The figures from the Hong Kong Census and Statistics Department suggest the demand for the yellow metal in China is waning. The latest report from the World Gold Council on gold demand in the first quarter of 2014 confirm this trend. Sales of bars and coins dropped substantially, as well as the premium on physical gold in China.
However, it would be premature to draw final conclusions based on the gold imports from Hong Kong. While these numbers do cover the bulk of Chinese gold imports, they do not include precious metals being shipped to China directly via Shenzhen or Shanghai. In the near future, China will also start importing gold directly to Beijing. Because we don’t have the numbers on direct imports to these three cities, we cannot provide an overall picture of the Chinese gold imports. The numbers published by the Hong Kong Census and Statistics Department do however give a good estimation, since most of the yellow metal is still imported from Hong Kong.
Last year, Chinese banks imported a record amount of 1.158,16 tonnes of gold from Hong Kong. A big drop in the gold price enticed the Chinese middle class to rush and buy more. With a more or less stabilizing price, the demand for the precious metal dropped. Year to date, the Chinese gold imports from Hong Kong are 347 tonnes, which is more than the 294 tonnes after the first four months of last year. If the demand for gold picks up later this year, China could surpass the record imports of last year.