China opens Beijing to gold imports, cutting into Hong Kong's transit role

The mainland has begun allowing gold imports through the capital, sources familiar with the matter said, in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves.

The opening of Beijing as a third import point after Shenzhen and Shanghai could threaten Hong Kong's pole position in the mainland's gold trade, as the country can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

The mainland does not release any trade data on gold. The only way bullion markets can get a sense of its purchases is from the monthly release of export data by Hong Kong, which supplied US$53 billion worth of gold to the mainland last year.

"We have already started shipping material in directly to Beijing," said an industry source.

The quantities brought in so far had been small as imports through Beijing had only been allowed since the first quarter of this year, sources said.

The People's Bank of China was believed to be adding to its gold reserves, the World Gold Council said, as it looked to diversify from US Treasuries. The central bank rarely reveals the numbers.

The 28 per cent plunge in gold price last year and the mainland's record bullion imports sparked speculation that the PBOC had added huge amounts of gold to its reserves and could make an announcement this year.