Gold Imports to China From Hong Kong Climb on Physical Demand

Gold shipments to China from Hong Kong increased in July as importers took advantage of local prices that were an average 2.1 percent higher than global markets and as mainland investors bought jewelry and coins.

Net imports, after deducting flows from China into Hong Kong, were 113 metric tons, from 101 tons a month earlier, according to calculations by Bloomberg. Mainland buyers purchased 129 tons in July, including scrap, compared with 113 tons in June, data from the Hong Kong government showed today.

Gold prices that advanced 18 percent from a 34-month low in June are attracting buyers in China, which is on track to overtake India as the world’s top bullion consumer this year. Premiums paid by jewelers on top of spot prices on the Shanghai Gold Exchange to take physical delivery of the metal were an average $27 an ounce in China during July, according to calculations by Bloomberg.

“China’s seeing robust gold sales this year,” said Duan Shihua, a partner at commodities fund Shanghai Leading Investment Management Ltd. “The high prices in China’s domestic market in July encouraged importers.”

Gold for immediate delivery in London fell 0.2 percent to $1,389.47 an ounce at 5:00 p.m. Beijing time. Bullion, which dropped as low as $1,180.50 an ounce on June 28, has declined 17 percent this year.

Shanghai Gold

Bullion of 99.99 percent purity on the Shanghai Gold Exchange in July made its firstly monthly gain since January, advancing by 9.2 percent. It extended gains by 4.4 percent last month.

China’s total gold consumption this year may jump by 29 percent to reach 1,000 tons, overtaking India to become the world’s largest gold consumer, according to the World Gold Council. China and India together account for more than half of the world’s gold demand, according to the council.

China’s purchases in July were 70 percent higher than the 75.8 tons in the same month last year, according to the data from the Hong Kong Census and Statistics Department. Mainland China doesn’t publish such data.

Exports of gold to Hong Kong from China were 16 tons in July, according to a separate Statistics Department statement, compared with 11.7 tons in June and 30 tons in July 2012.

To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at frong2@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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