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China's gold imports via Hong Kong fall in January on COVID-19 travel curbs

Thu Feb 25 2021

 

China's net gold imports via Hong Kong fell in January, after rising for two consecutive months, as COVID-19 related restrictions reduced demand in the run-up to the Lunar New Year holiday.

 

Gold prices in the top consumer of the metal, flipped back into a discount - a situation that prevailed for most of 2020 as the pandemic curbed demand - in the week to Jan. 29.

 

Small premiums earlier that month disappeared as fresh travel restrictions deterred retail buyers.

 

Net gold imports via Hong Kong to China stood at 4.2 tonnes in January compared with 5.6 tonnes in December, while they were down 55% on an annual basis.

 

Total gold imports via Hong Kong to China fell to about 7.8 tonnes from 11.2 tonnes in December.

 

"The drop in gold going into China was strictly due to less demand over the Lunar New Year. Jewellers couldn't just sell it as there was no holiday demand," said Stephen Innes, chief global market strategist at financial services firm Axi.

 

"They tried to bring in a lot before the holidays... but because of the lockdown they didn't get the bounce in physical (demand) they were expecting over the Lunar New Year."

 

The Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing.

 

In early February, the city of Shenzhen unveiled measures to turn its jewellery-filled Luohu district into a gold-based financial hub with links to neighbouring Hong Kong, Shanghai and even London.

 

Source: https://www.brecorder.com/