SINGAPORE: Hong Kong’s gold shipments to China nearly doubled in July from a year earlier, while exports over the first seven months exceeded total 2011 volumes, suggesting China is well on its way to overtake India as the world’s largest gold consumer in 2012.
China does not publish gold trade data, so trade numbers from Hong Kong - a main conduit for the precious metal to enter China - serves as a gauge of China’s gold demand that soared 20 per cent in 2011 according to the World Gold Council.
In July, Hong Kong’s gold exports to China grew 12 per cent on the month to nearly 76 tonnes, the second-highest level so far this year, while it received nearly 30 tonnes of gold from the mainland, bringing the net exports to 46 tonnes, also its second highest this year after April.
In the first seven months of 2012, Hong Kong sent 456.33 tonnes of gold across the border, compared to a total of 427.889 tonnes in 2011, data from the Hong Kong Census and Statistics Department showed.(www.censtatd.gov.hk)
“We are on track for a very strong year,” said Nick Trevethan, senior commodity strategist at ANZ in Singapore.
“We already passed the 2011 exports, and within a month or two we will probably overtake 2011’s net exports of 380 tonnes. The China gold story hasn’t gone away.”
Some analysts suspect that central bank purchases may have played a part in China’s strong gold imports in July, given that consumer sector demand was unimpressive due to the summer lull and worries about the economic slowdown.
Spot gold hovered just below $1,740 an ounce, after breaking above that level for the first time since end of February in the previous session, fuelled by expectations for further stimulus from the US Federal Reserve.
A rally in gold prices since mid-August may temper some jewellery demand, but the week-long National Day holiday at the beginning of October is traditionally a high time for jewellery sales in China.
In the first half of 2012, China’s consumer gold demand rose 3 per cent from a year earlier to 400.1 tonnes, exceeding India’s consumption of 388.6 tonnes, the World Gold Council said in a report. Last year, India’s gold demand stood at 961.4 tonnes, versus China’s 771.2 tonnes.