(Reuters) – China’s net imports of gold from Hong Kong climbed again to record the second-highest. The current top gold-consumer imported in October over 100 tonnes of gold for the sixth straight month.
Chinese banks and retailers expect to see a strong demand during late January, the Chinese New Year. Gold is traditionally built as gifts during this season.
China is set to overtake the title of the largest gold consumer in the world this year from India. Demand has been picking up since gold prices fell 25% in 2013, the first significant drop in 13 years.
The Indian government has taken several progressive measures to discourage gold importing to reduce their current account deficit. Exchange-traded funds (ETFs) backed with gold also suffered huge outflows this year. Demand from China has supported gold price and absorbed most of the shock to gold prices.
In October, China’s net imports of gold from Hong Kong reached 131.19 tonnes, up by 20.276 tonnes from September’s 110.914 tonnes. In March, Hong Kong exported 136.185 tonnes of gold to China. Total Chinese imports of gold from Hong Kong totaled 147.922 tonnes in October.
According to analysts from Hong Kong, October marks the beginning of the wedding season. That might increased demand on jewelry and lead retails to re-stock ahead of the expected demand.
International trade data shows a considerable amount of gold is entering China directly through Shanghai. The figures above are from Hong Kong Census and Statistics Department, the closest numbers reports might have as China doesn’t publish and gold trade data.
So far, Chinese imports of gold from Hong Kong reached 986 tonnes for the past 10 months, putting the country ahead of India, last year’s world largest gold consumer. India’s imports of gold in the same period totaled just over 600 tonnes. Note that Chinese imports of gold this year more than doubled compared to last year.