Off The Wire
China's gold imports via Hong Kong rebound in March, but slump y/y
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April 27 (Reuters) - China’s net gold imports via Hong Kong in March nearly trebled from the previous month as the country began gradually easing coronavirus restrictions, but imports were still down 63% from last year as the pandemic choked demand, data showed on Monday.
Net imports via Hong Kong rose about 196% to 13.523 tonnes but the jump was from low levels, at 4.567 tonnes in February, which was a more than 50% drop from January, monthly data from the Hong Kong Census and Statistics Department showed.
Total gold imports via Hong Kong, meanwhile, surged 179% to 14.208 tonnes from 5.092 tonnes in February. This compares with the 41.082 tonnes in March last year.
“While at first glance, the imports surged versus January and February, it is partly expected, as China had begun reopening its economy in March. But the imports are still a far cry from the 36.4 tonnes (of net imports) in March 2019,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
The pace of business resumptions in China in March, were however, constrained by the country’s efforts to guard against a second wave of infections from abroad.
“Other than Hong Kong, imports from Switzerland, Singapore and South Africa fell to minimum levels in March.”
Dealers in China have been offering massive discounts of about $50 to $70 an ounce over benchmark spot gold prices during the past couple of weeks as restrictions due to the pandemic kept buyers away in the world’s biggest bullion hub.
Weak physical demand, especially from major hubs India China, was expected to dampen a rally in spot prices, a Reuters poll found last week.
The Hong Kong data may not provide a complete picture of Chinese purchases as gold is also imported via Shanghai and Beijing. (Reporting by Asha Sistla and Arpan Varghese in Bengaluru, editing by Louise Heavens)