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Gold Imports From China & India Mixed; Expect Demand To Rise - Capital Economics

(Kitco News) - According to the latest data, China’s gold imports from Hong Kong rose in September for the third consecutive month, and analysts from one U.K.-based research firm expect this trend to continue.

“We expect total imports by China to continue their upward trend in the remainder of the year and imports by India to pick up too, as low prices and a lack of attractive investment alternatives prompt additional buying,” said analysts from Capital Economics in a report Tuesday.

They noted that data released from the Hong Kong Census and Statistics Department Tuesday showed that gold imports via Hong Kong increase by 64% month over month and by 42% year over year to the highest level since last November. According to news reports, the country’s net gold imports Gold Jewelry from Hong Kong climbed to 97.242 tonnes in September from 59.319 tonnes in the prior month.

“Meanwhile, imports via Switzerland also rose by 29% m/m and 67% y/y according to Swiss Federal Customs Administration data,” they added.

The analysts explained that demand for gold is on the rise in China due to “fears of a hard landing and expectations of further policy easing after this summer’s equity market crash.”

“[W]e expect demand to pick up ahead of the Chinese New Year in February, especially given current low prices,’ they added.

Looking at India, which saw gold imports fall by 58% month over month and by 41% year over year in September, the analysts said they still expect demand to rise.

“India’s imports for January to September are still 204 tonnes higher than the corresponding period last year,” they noted, adding that they still expect October figures to show a pick-up in imports as demand rises ahead of the Diwali festival on Nov. 11.

“Overall, we expect demand from India and China to rise in the remainder of the year as low gold prices and jewelry buying ahead of religious festivals stimulates buying, prompting overall increases in 2015 consumer demand from the two countries of 14% and 7% y/y respectively.”

By Sarah Benali of Kitco News;
Follow me on Twitter @SdBenali



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