The Chinese gold imports was unexpectedly low in April compared to March gold imports and the demand surge after April’s low.
Premiums on gold bullion bars and coins in Asia jumped into a record high due to the tremendous demand clearing the shelves from gold. Gold dealers ordered deliveries that should be reflected in May reports.
Since China doesn’t publish gold import data, the nearest accurate numbers are from Hong Kong, the main exporter of gold to mainland China. The Hong Kong Census and Statistics Department reports showed a decline by 44% in the Chinese gold imports to record 125.715 tonnes in April from 223.519 tonnes in March.
The net gold flow, after deducing Hong Kong’s gold imports from China reached 80.101 tonnes, compared to 136.185 tonnes in March.
The reason behind this fall, simply put, was the lack of gold in China, or the world in general to meet this demand. Gold production in China was near 403 tonnes in 2012, according to the WGC, but the consumption was near 832.2 tonnes.
The chines gold market is tightly controlled by a few banks, while exports are licensed to authorized jewelry makers.
The retail sales in Hong Kong rose by 30-40% in April, according to Chow Tai Fook, the largest jewelry retailer by market value in Hong Kong.
On the other hand, India, the world number one gold consumer, reported an increase of the gold imports in May despite the legal and financial restrictions legal implements by the Indian government and RBI.
The demand on gold in China is expected to ease after May through the rest of the year, except September and October, a wedding season in China.