Gold imports by China from Hong Kong fell for the first time in four months in January after a surge in purchases in the previous months to meet Lunar New Year demand and as investors curbed buying on falling prices.
Mainland China bought 51,303 kilograms (51.303 metric tons) of gold, including scrap and coins, down from a record 114,405 kilograms in December, according to export data released by Hong Kong’s Census and Statistics Department yesterday. Mainland China doesn’t publish such data.
Gold has fallen about 6.5 percent this year as the U.S. stocks extended a record rally amid speculation that the Federal Reserve may rein in stimulus as the recovery gains traction, curbing demand for safe-haven assets. Billionaire investor George Soros cut his stake in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, by 55 percent in the fourth quarter, according to government filings.
“The mainland Chinese gold consumption is highly correlated to the seasons -- usually peaking in the months leading to the Lunar New Year,” Song Heping, assistant general manager at Xiamen City Commercial Bank Co., said by phone from Xiamen yesterday. The weeklong Lunar New Year holiday was in February this year and in January in 2012.
Purchases in January were 56 percent higher than the 32,948 kilograms a year earlier, the data showed. Shipments almost doubled to 834,502 kilograms in 2012 from a year ago, according to Bloomberg calculations, as rising incomes in the world’s second-largest economy underpinned increased demand and helped the metal to post a 12th annual gain.
“Apart from the usual season-related demand issue, investors also shied away from bullion due to perceived weakness in prices,” Jiang Shu, a senior analyst at Industrial Bank Co., said from Shanghai.
Gold futures for April delivery slumped 0.6 percent to $1,566 an ounce at 9:34 a.m. on the Comex in New York. A close at that price would mark the largest drop for a most-active contract since Feb. 28, capping a fifth straight weekly decline.
Exports to Hong Kong from China were 31,723 kilograms in January, according to a separate Statistics Department statement, up from 29,718 kilograms in December, and compared with 5,102 kilograms in January 2012. Net imports by China, after deducting flows to Hong Kong from China, were 19,580 kilograms in January, compared with 84,687 kilograms a month earlier.