China's gold imports jump to second highest on record in October
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China's gold imports jump to second highest on record in October

Last Updated: Wednesday, November 27, 2013, 16:29
 
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China's gold imports jump to second highest on record in October
Singapore: China's net gold imports from Hong Kong climbed to their second-highest on record in October, as the country bought more than 100 tonnes of gold for a sixth straight month to meet unprecedented demand.

The imports - the biggest since an all-time high in March - show that banks and retailers expect to see strong demand in the build up to Chinese New Year in late January, when gold is bought for gifts.

Demand in China, set to overtake India as the biggest gold consumer this year, has hit record highs as gold prices have fallen about a quarter in 2013 - their first decline in 13 years.

Rising Chinese demand has supported gold prices this year, helping offset outflows from gold-backed exchange-traded funds and a drop-off in demand in India, where a government struggling to bring down a worryingly high current account deficit imposed rules to discourage gold imports.

China's net purchases from Hong Kong totalled 131.19 tonnes in October, up from 110.914 tonnes in September, according to the Hong Kong Census and Statistics Department.

The purchases from Hong Kong were the strongest since March when China bought a record 136.185 tonnes.

Total imports - including purchases later re-sold to Hong Kong - rose to 147.922 tonnes in October from 116.306 tonnes a month ago.

Imports jumped as banks and retailers stocked up to meet peak seasonal demand ahead of the Chinese New Year in late January, traders said.

"October was also the beginning of the wedding season, which could have prompted more demand for jewellery," said Chen Min, a precious metals analyst at Jinrui Futures in Shenzhen.

"But I don't think these high figures are sustainable," Chen said, as buying interest cools off after months of aggressive purchases.

China does not publish any gold trade data. The numbers from Hong Kong, a major conduit for gold into the mainland, give the best picture of the country's trade in the precious metal.

Global trade data, however, shows that a considerable amount of gold is entering China directly through routes such as Shanghai.

The volume of imports last month puts China strongly ahead of India as the largest consumer of bullion.

Chinese imports from Hong Kong have totalled about 986 tonnes for the first ten months of the year, more than double from a year-ago period. India's total imports for the same period stand at just over 600 tonnes, with demand cut by the new rules to discourage imports.



Reuters

First Published: Wednesday, November 27, 2013, 16:24


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