Mar 27, 2024

China’s Import of Hong Kong Gold Slumps 48%

Reuters recently reported that gold imports to China via Hong Kong fell 48% in February, to the lowest level since November. According to data from the Hong Kong Census and Statistics Department, net gold imports in January stood at 76.248 metric tons, dropping to 39.826 tons in February.

StoneX analyst Rhona O'Connell offered her insights into what the downturn might mean, considering the amount of gold imported into the country is controlled by the People's Bank of China.

"It sounds as if international bank import quotas have been delayed as the government defended the currency” O’Connell was quoted by the outlet. In total, gold imports from Hong Kong, including re-exports, were down about 45% at 45. 297 tons.

According to O'Connell, local residents remain concerned about the property sector, which both increases the reluctance for "discretionary" spending but bolsters the appeal of gold for hedging risk.

Starting Feb. 10, markets in China were closed for a week for the New Year holidays. However, last month, Chinese dealers offered gold at premiums of anywhere between $36-$55 an ounce over global benchmark spot compared to a $37-$57 range in January.

The Hong Kong influence doesn’t likely cover the entire story. Similarly, leading gold hub Switzerland, cut exports to China from 54,625 kilograms (kgs) of gold in February, down from 77,807 kgs in January.

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