(Kitco News) – China's net imports of gold via Hong Kong fell by 24% in December compared to the prior month, the Hong Kong Census and Statistics Department announced on Tuesday.
Net imports to China from Hong Kong totaled 12.205 tonnes in December, a steep drop from the 16.160 tonnes imported in November.
China's total gold imports via Hong Kong also fell 7.3% to 28.014 tonnes in December, down from 30.220 tonnes in November.
"The increased prices seem to have some impact on the demand,” independent analyst Ross Norman told Reuters, adding that although domestic prices are higher than international prices, the market still appears to be holding up well.
"I believe the most important month to look at will be January, when these figures are released,” Norman said. “This will give an indication of the level of stocking before Chinese New Year, which is a traditionally strong time period."
Earlier this month, the People's Bank of China released data showing that the central bank had extended its gold-buying streak to 14 consecutive months.
And the country’s retail market also remains white-hot, with gold trading at a premium of up to $8 per ounce over the international spot price this week, with Chinese buyers and sellers saying they expect gold demand to remain strong despite the yellow metal trading above $5,300 per ounce for the first time.
According to a Reuters report published Tuesday, customers have been cramming into jewelry stores in Shanghai and Hong. “There are still quite a lot of people buying it, because gold awareness is a long‑term trend and it’s still heading upwards,” Shanghai gold seller Zhao Jinhao said. “It’s risen from just over 20 yuan back in the 1980s to more than a thousand yuan now, and it has been on an upward trajectory the whole time.”
In Hong Kong, Simon Littmann, executive manager of precious metals trader Swiss Investors Corporation Limited, said this month is the strongest business he’s seen in 20 years.
“Last year was probably our second-busiest year, and this year is looking to get very busy, but we have supply problems," he said, explaining that the supply of small gold bars has been delayed due to strong demand as global refineries scramble to boost production to meet surging retail demand.
The impact of record-high prices and reforms to the tax code are being felt in some areas, however, with Chinese wholesale gold demand falling 11% last year, weighing on jewelry demand even as interest in bars and coins skyrockets.
Meanwhile, the record prices are driving others to cash in their precious metals. “Dozens of people queued outside the door of the Chong Kee gold shop in Hong Kong’s central business district on Tuesday waiting for the chance to trade in gold and silver,” Reuters reported.
