Mainland doubles gold imports from Hong Kong in July on strong demand

Bullion consumption on mainland expected to overtake India's after HK imports double in July

PUBLISHED : Tuesday, 11 September, 2012, 12:00am
UPDATED : Tuesday, 11 September, 2012, 1:52am


The mainland's gold imports from Hong Kong almost doubled in July from a year earlier, official figures show.

Imports of the precious metal in the first seven months of the year were more than four times as high as in the same period last year, supporting industry expectations that gold consumption on the mainland will overtake India's this year.

Mainland imports of bullion from Hong Kong surged to 75.84 tonnes in July from 38.14 tonnes last year, according to net export data released by the Census and Statistics Department on Friday. For the first seven months of the year, imports jumped to 456.3 tonnes from 100.5 tonnes a year earlier.

In terms of net imports from Hong Kong, the July volume rose 27.3 per cent year on year to 45.97 tonnes.

For the first seven months, mainland net imports from Hong Kong totalled 298.97 tonnes, up from 84.04 tonnes a year earlier.

Unlike base metals such as copper and aluminium, the mainland does not report its trade figures for gold, which is held as part of the central bank's reserves.

Imports from Hong Kong, the main channel for gold to be brought to the mainland, is seen by industry people as a proxy of the mainland's gold demand.

The World Gold Council projected in February that mainland consumption would climb 20 per cent this year and surpass that of India, where bullion buying has been dampened by the weak rupee and high inflation.

The council's Far East managing director, Albert Cheng Leung-ho, expects gold jewellery purchases on the mainland to increase 10 to 20 per cent this year after gaining 13 per cent to 510.9 tonnes last year. Investment in gold bars and coins would jump 25 per cent after swelling by 38 per cent to 258.9 tonnes last year.

BOC International gold sector analyst Robin Tsui said the July figure was consistent with a rising trend that started in 2010, as investors bought the precious metal as a hedge against inflation.

Demand could rise further this year, as Beijing might increase the availability of credit, which would likely stoke inflation, he said.

"Unlike Hongkongers, mainlanders cannot invest in gold exchange-traded funds and have to buy physical gold through banks and gold distributors," Tsui said.