Net gold imports via HK turn negative

bengaluru — China’s gold imports via Hong Kong in April fell short of its exports for the first time since at least 2011, as measures to contain the spread of coronavirus hammered demand in the top consumer.

Net imports in April crashed by about 176 per cent to -10.3 tonnes versus the previous month, data from the Hong Kong Census and Statistics Department showed on Monday. The drop came after net gold imports nearly trebled to 13.523 tonnes in March.

“China’s gold price was trading at too big a discount compared to the overseas price, so gold imports fell a lot because supply inside the country is abundant already,” Samson Li, a Hong Kong-based precious metals analyst at Refinitiv, said. Dealers in top consumer China sold gold at discounts of up to $50$70 an ounce versus benchmark spot prices last month, the most on record according to data going back to 2014.

“At the same time, gold flowed out from mainland China to Hong Kong, thus it turned from net imports to net exports in April, the first time since 2011,” Li said. Exports to Hong Kong stood at 14.513 tonnes, compared with 0.685 tonnes reported for March.

China’s total gold imports via Hong Kong plunged more than 70 per cent to 4.213 tonnes from 14.208 tonnes in March. The fall in shipments followed a slide in demand for the precious metal as the country battled the coronavirus pandemic. Beijing dropped its annual growth target for the first time on Friday.

The Hong Kong data may not provide a complete picture of Chinese purchases as gold is also imported via Shanghai and Beijing. Unrest returned to Hong Kong, as thousands of people rallied on Sunday in defiance of coronavirus-related curbs to protest against Beijing’s plan to impose national security laws on the city. —