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China's Swiss gold imports soar nearly 150% in July as gold price trades below $1,800

Kitco News

(Kitco News) China stepped up its gold imports from Switzerland in July, purchasing the most bullion in more than five years, according to the Swiss Federal Customs Administration.

Demand from China is starting to pick up over the summer months, with Switzerland shipping 80.1 tonnes of gold to China, worth $4.6 billion.

This is a monthly increase of 146% and the biggest cargo since December 2016, Swiss customs data showed Thursday.

Increased demand from China comes as gold continues to trade below the $1,800 an ounce level, disappointing many gold bulls but providing a cheaper entry point for long-term investors.

After hitting a peak of more than $2,000 an ounce in March, gold has been in a downtrend, with some analysts warning that a bigger selloff could be around the corner

Analysts point to aggressive rate hikes by the Federal Reserve and a stronger U.S. dollar as some of the main obstacles holding gold back this year.

China's retail consumers are known to jump back into the gold market at the right price levels. On top of that, China saw some COVID-related lockdowns lifted, which helped to kickstart demand for the precious metal.

The increased demand from China boosted Switzerland's gold exports in July, lifting them to 186.2 tonnes — the highest level since 2016.

"Big increase in Swiss gold exports, with July's total (202t) more than double that of June. It's also the highest monthly total since December 2016 (297t). A 147% jump in exports to China was the main driver, but significant increases seen in most major markets," said World Gold Council's senior analyst Krishan Gopaul in a tweet.

The breakdown of exports from Switzerland to other countries showed that India bought 15.8 tonnes of gold in July after purchasing 7.7 tonnes the previous month, an increase of 105%.

On the other hand, Switzerland's import data revealed that the country purchased 261 kg of gold from Russia, slightly less than in the prior month

Switzerland imported 284 kg of Russian gold worth about $16 million in June, which was significantly lower than the 3 tonnes worth about $200 million imported in May.

In July, the Swiss officials responded that the imported gold originated in Russia but was shipped from Britain, adding that customs is investigating whether any sanctions were violated.

In August, Switzerland adopted the EU ban on buying, importing, or transporting gold and gold products from Russia.

Switzerland is a global transit hub for gold, which is why the country's export data is often used as a market gauge for which countries are buying gold and when.

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