Chinese gold imports from Hong Kong jump 27% in Q1

Chinese gold imports through Hong Kong fell back a little in March compared with the previous month, but the overall trend is still upwards.

Author: Lawrence Williams
Posted: Monday , 28 Apr 2014

LONDON (MINEWEB) -

It depends on whether you are a glass half full or half empty person – or perhaps whether you are at heart, or your set editorial policy is to be, a gold bull or a gold bear, but the mainstream media is yet again seizing on the latest Chinese gold imports from Hong Kong as another indicator that the Middle Kingdom’s appetite for gold is at last falling away. True, the country’s gold imports from Hong Kong fell to a ‘paltry’ 81 tonnes in March, down from a whopping (and probably anomalous) 111 tonnes in February. But a slightly longer term look at the figures shows that Chinese imports via the HK route actually ROSE by 27% in the first quarter of the current year compared with a year ago. And last year China reported record gold import figures through Hong Kong of 1,139 tonnes in 2013 – almost double those of a year earlier. So, if anything, the latest figures from Hong Kong could be suggesting that gold demand in mainland China is yet again heading for a new record in 2014.

NET CHINESE GOLD IMPORTS VIA HONG KONG 2013/14

As we have pointed out before on Mineweb, taking month by month import figures to suggest a trend can be extremely misleading – and it is worth looking at last year’s month by month totals – varying from as little as 20 tonnes to over 130 tonnes to see that there are wide fluctuations . So can a single month’s ups or downs really tell us anything significant at all about the Chinese market and appetite for gold? There certainly has been some post-Chinese New Year downturn in gold demand this year as seen in withdrawals from the Shanghai Gold Exchange, but gold demand in the runup to the New Year festivities this year was exceptionally high compared with a year earlier, so a post New Year downturn should not be seen as too surprising.

There are undoubtedly factors at play at the moment which may be mitigating overall Chinese demand, but it may also still be rising overall – it is too early to say. The mainstream media, and its tame sound-bite commentators it can always call upon for a quote, are more than happy to be talking the market down – when a longer term look may suggest it is actually rising. Yet more ammunition for the conspiracy theorists!

Last year, China’s April imports through Hong Kong were a relatively weak 77 tonnes – down from around 136 tonnes in March, but this was followed by six successive months where net gold imports from Hong Kong exceeded 100 tonnes before slipping back quite sharply in November. Whether China’s gold demand is really falling, or on the up, will be seen over the next few months. It is still way too early to say.