China’s May gold imports via Hong Kong dip as retail demand eases

CHINA’S net gold imports via Hong Kong fell by about 1.7 per cent in May from the previous month, as concerns over the top consumer’s economy were seen weighing on retail demand for jewellery.

Net imports into the world’s top gold consumer stood at 49.056 tonnes in May, compared with 49.906 tonnes in April, Hong Kong Census and Statistics Department data showed on Tuesday (Jun 27).

Total gold imports via Hong Kong were down 3.5 per cent at 51.722 tonnes, from 53.581 tonnes in April.

“The decline of gold imports via Hong Kong comes as no surprise given that the Chinese economic recovery is clearly faltering and with it demand for luxury items such as gold jewellery,” said independent analyst Ross Norman.

Several major banks have cut their 2023 GDP forecasts for China after recent data indicated a shaky post-Covid recovery.

China’s net gold imports via Hong Kong could drop 7-8 per cent in the second half of the year, said Debajit Saha, lead metals analyst at LSEG.

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“Consumers may prefer to go for a comparatively low-ticket purchase than the high value ones which Chinese consumers were known for before the pandemic,” Saha added.

The Hong Kong data may not give a full picture of Chinese purchases because gold is also imported through Shanghai and Beijing.

But this could be a “temporary setback for bullion given expectations that China will implement policies to stimulate broad economic growth”, said Norman.

Chinese Premier Li Qiang on Tuesday said Beijing would take steps to boost demand and invigorate markets.

Last month, physical gold prices in China swung between US$4 discounts and US$9 premiums to global spot prices which slid from as much as US$2,072 per ounce in early May to as low as US$1,931 by end-May. REUTERS