China renews appetite for gold with US$8.5 billion set to arrive as central bank relaxes quotas
- China’s appetite for gold jewellery, bars and coins has recovered as the economy rebounded in recent months
- Around 150 tonnes of gold, worth US$8.5 billion at current prices, are likely to be shipped by next month, multiple sources claim
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China has given domestic and international banks permission to import large amounts of gold into the country, according to five sources familiar with the matter, potentially helping to support gold prices after a months-long decline.
With China’s economy rebounding strongly since the second half of last year, its appetite for gold jewellery, bars and coins has also recovered, and since January domestic prices have been higher than global benchmark rates, making it profitable to import bullion.
The People’s Bank of China (PBOC), the nation’s central bank, controls how much gold enters China through a system of quotas given to commercial banks. It usually allows enough metal in to satisfy local demand but sometimes restricts the flow.
In recent weeks, it has given permission for large amounts of bullion to enter, the sources said.
“We had no quotas for a while. Now we are getting them … the most since 2019,” said a source at one of the banks moving gold into China.