Gold News

China's Gold Bullion Imports Fall "Due to Premiums & Paperwork"

CHINA'S net imports of gold bullion through Hong Kong fell 41% in April from March, new data showed today.

Revising the net figure for March up to 136 tonnes – higher even than the 130-tonne monthly record first reported in May – the Census Bureau said Wednesday that April saw of gold imports through Hong Kong to China total 126 tonnes, with 46 tonnes then re-exported back through the island.

The net reading of 80 tonnes "is a surprise," Reuters quotes Ronald Leung, senior dealer at Hong Kong's Lee Cheong Gold Dealers. "Prices had fallen in April, but there was not much supply at that time.

"Maybe that's why imports have fallen. Premiums [above international benchmark prices] were sky high at that time."

Hong Kong is the major route for physical gold bullion into the world's #2 gold consumer nation. Local premiums over and above the global spot price – typically quoted for London delivery – surged to record highs in May, reaching $6 per ounce in what one official called "frenzied buying" by mainland Chinese households.

Furthermore, "Some qualified banks used up their gold import quota in the first three months," says Tian Rui at INTL FC Stone, speaking to Bloomberg.

"[They] weren't able to get the paperwork done fast enough to bring in bullion in April."

Looking to the next month's data, "We might see higher imports [for] May," reckons Tian, "because demand surged after the rout" in gold bullion prices.

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