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China's net gold imports via Hong Kong slump nearly 59% in May

Kitco News

(Reuters) - China's net gold imports via Hong Kong more than halved in May from the previous month, when they touched the highest level in nearly three years, as demand for the precious metal faltered amid fresh coronavirus-led restrictions.

Net imports stood at 21.78 tonnes in May compared with 52.82 tonnes in April, Hong Kong Census and Statistics Department data showed on Monday. Total gold imports via Hong Kong fell to 26.684 tonnes from 55.699 tonnes, the data showed.

In May last year, gold imports fell below exports for a second straight month.

China's net gold imports via Hong Kong slump in May

Reuters Graphic

Guangzhou, one of the top consumer of gold in the country, is on lockdown due to an increase in COVID-19 cases, affecting gold importation, said Bernard Sin, regional director for Greater China at MKS.

An outbreak of a highly-infectious coronavirus strain since late May has prompted the authorities in the industrial hub to impose lockdowns in certain neighborhoods, while shutting down entertainment venues and markets.

Demand also fell from banks after the country's banking regulator, the China Banking and Insurance Regulatory Commission, asked lenders to stop selling investment products linked to commodities futures to retail buyers, Sin added.

Prices of physical gold in the top consumer flipped into a premium recently, mostly on retreating global benchmark spot prices.

The Hong Kong data does not provide a complete picture of Chinese purchasing, as gold is also imported via Shanghai and Beijing.

Reporting by Eileen Soreng in Bengaluru; Additional reporting by Swati Verma; Editing by Louise Heavens and Jan Harvey

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