China’s net gold imports through Hong Kong experienced a significant decline of approximately 48% in February, marking the lowest level since November, as revealed by data released on Tuesday. Net imports totaled 39.826 metric tons for the month, down from 76.248 tons in January, according to statistics from the Hong Kong Census and Statistics Department. The total gold imports via Hong Kong, inclusive of re-exports, also witnessed a decrease of about 45% to 45.297 tons.
Analyst Rhona O’Connell from StoneX attributed the decline to potential delays in international bank import quotas amid government efforts to support the local currency. Concerns surrounding the property sector have led to a reluctance among residents to engage in discretionary spending, although there is a growing interest in purchasing gold as a hedge against risks. The Lunar New Year holidays in February resulted in markets being closed for a week, impacting trading activities. The People’s Bank of China regulates gold imports through quotas allocated to commercial banks. In terms of pricing, Chinese dealers offered gold at premiums ranging from $36-$55 per ounce over global benchmark spot prices in February, compared to the $37-$57 range observed in January.
While the Hong Kong data provides insights into Chinese gold imports, it does not capture the complete picture as gold is also imported through Shanghai and Beijing. Similarly, Switzerland, a key bullion refining and transit hub, recorded a decline in gold exports to China in February compared to January. In related developments, India recently granted its central bank permission to import gold without paying import duties.