China's gold imports drop 42pc

PUBLISHED : Tuesday, 31 December, 2013, 1:07am
UPDATED : Tuesday, 31 December, 2013, 4:04am

The mainland's net gold imports from Hong Kong fell 42 per cent to below 100 tonnes last month, reflecting a drop in demand from jewellers and retail investors after strong purchases in recent months.

Net flows into the mainland, excluding imports by Hong Kong from the mainland, slipped to 76.39 tonnes from 131.19 tonnes in October, data from Hong Kong's Census and Statistics Department showed.

Total mainland imports from Hong Kong stood at 107.36 tonnes, down from 147.92 tonnes.

"It seems that banks have finished using up the quotas, which may be the reason why imports were down," a dealer in Hong Kong said. "Another reason is that people already have enough gold after recent purchases because prices had been steady in November."

The People's Bank of China plans to increase the number of firms allowed to import and export gold and ease restrictions on individual buyers of the precious metal, according to a draft policy document issued in September.

The mainland could have overtaken India as the world's biggest consumer of gold this year as falling prices encouraged purchases for personal use and investment. Beijing does not publish gold trade data and the numbers from Hong Kong - a main conduit for gold into the mainland - give the best picture of its trade of the precious metal.

The price of gold ticked down yesterday, heading for its biggest annual loss in more than three decades - nearly 30 per cent - as firm equities and the prospect of a recovery in the global economy stole its shine.