China’s net monthly gold imports via Hong Kong in August surged nearly 61%, after falling to their lowest in more than eight years in July, the Hong Kong Census and Statistics Department data showed on Thursday.
Net imports via Hong Kong to China, the world’s top consumer of the metal, increased to 12.997 tonnes last month from 8.085 tonnes in July, the data showed.
Total gold imports via Hong Kong also rose in August for the first time since April, rising 43.5% to 15.661 tonnes from 10.915 tonnes in July.
Both the net and total imports via Hong Kong to China in July had fallen to their lowest since May 2011.
In August, China partially lifted restrictions on imports of gold, bullion industry sources said, loosening curbs that had stopped an estimated 300-500 tonnes of the metal from entering the country since May.
China imported more gold through Switzerland and Singapore (in August), much more than through Hong Kong, according to Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
China's gold imports increased in August, mostly from Switzerland and Singapore. While volume from Hong Kong increased from July, it was still weak by historical standard. pic.twitter.com/wxAC65fFpZ— Refinitiv Metals (@Metals) September 27, 2019
Hong Kong is next to Shenzhen, which is China’s largest jewellery hub and the low import volume from Hong Kong shows how weak the gold jewellery sector in mainland China has been, Li said, adding most of the increase in gold demand this year is from investment demand.
International benchmark spot gold prices marked a fourth consecutive monthly gain in August, with physical bullion in China being sold at a premium of around $6 to $10 over the benchmark for most of the month.
Months-long political unrest in Hong Kong, traditionally the main physical gateway of gold to China, has subdued jewellery sales and stoked concerns about shipping gold out of the city, adding to Beijing’s decision to step up direct gold imports as it seeks to restrict outward capital flows.
China does not provide trade data on gold, which is why the Hong Kong figures serve as a proxy for flows to the mainland.
The Hong Kong data, however, may not provide a complete picture of Chinese purchases as gold is also imported via Shanghai and Beijing.