China's net gold imports via Hong Kong drop in October
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CHINA’S net gold imports via Hong Kong fell for a second consecutive month in October, data showed on Monday (Nov 27), as a patchy economic recovery weighed on demand in the key bullion market.
Net imports into China, traditionally the biggest gold consumer in the world, fell 23 per cent to 26.793 metric tons in October, compared with 34.757 tons in September, data from the Hong Kong Census and Statistics Department showed.
Total gold imports via Hong Kong fell 19 per cent to 33.581 tons.
“Local Chinese demand has apparently been relatively sluggish and it looks also as if quotas are still low as the government continues to defend the currency,” said StoneX analyst Rhona O’Connell.
The People’s Bank of China controls the amount of gold entering the country via quotas to commercial banks.
“Looking ahead, the continued unsettled nature of the economy is likely to keep consumers from much discretionary spending and that could keep a lid on gold demand.”
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The Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing.
China’s consumer prices swung lower in October, as key gauges of domestic demand pointed to weakness not seen since the pandemic, while factory-gate deflation deepened, casting doubts over the chances of a broad-based recovery.
Profits at China’s industrial firms extended gains for a third month in October, albeit at a slower pace, suggesting more policy support from Beijing is needed to help shore up growth.
China also saw lower gold shipments from Switzerland in October, data showed last week.
Last month, Chinese dealers sold gold at premiums of anywhere between US$25 and US$60 an ounce over global benchmark spot prices, down from record high premiums of around US$135 seen in September.
“We expect (gold) demand to remain lacklustre due to higher prices till restocking begins ahead of the Chinese New Year,” ANZ commodity strategist Soni Kumari said. REUTERS
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