China Gold Imports From Hong Kong Fall on Quotas

October 8, 2013 at 11:36

truthing

Gold shipments to China from Hong Kong fell in August after some Chinese banks used up import quotas and as buyers became wary of rapid price gains.

Net imports, after deducting flows from China into Hong Kong, were 110.2 metric tons, from 113.2 tons a month earlier, according to calculations. Mainland buyers purchased 131.4 tons in the month, including scrap, compared with 129.2 tons in July, data today from the Hong Kong government showed.

Gold prices rallied for a second month in August, gaining 5.3 percent, as conflict in Syria raised concern that the supply of oil from the Middle East could be disrupted, stoking inflation. Some Chinese banks might have run out of import quotas after purchases in the first seven months jumped by 89 percent from a year ago, said Duan Shihua, a senior partner at Shanghai Leading Investment Management Ltd.

“Appetite for gold seemed to slow somewhat as investors became more cautious after the rapid run-up in prices,” Duan said. “Some banks might have used up their quotas.”

Bullion of 99.99 percent purity on the Shanghai Gold Exchange rose for the second month in August, advancing by 4.4 percent.

China’s total gold consumption this year may jump by 29 percent to reach 1,000 tons, overtaking India to become the world’s largest consumer, according to the World Gold Council. China and India combined account for more than half of the world’s demand, according to the Council.

China’s purchases in August were more than twice as much as the 53.5 tons in the same month last year, according to the data from the Hong Kong Census and Statistics Department. Mainland China doesn’t publish such data.

Exports of gold to Hong Kong from China were 21.3 tons in August, according to a separate Statistics Department statement, compared with 16 tons in July and 26.5 tons in August 2012.

China may allow more companies to import and export the precious metal under draft rules released by the central bank on Sept. 30.

Financial institutions and companies that produce more than 10 tons of gold a year may be considered, the People’s Bank of China said on its website.