Gold shipments to China from Hong Kong decreased by more than 50 percent in November as demand from investors weakened after prices slid for a third month.
Net imports, after deducting flows from China into Hong Kong, were 60.9 metric tons in November from 129.9 tons in October, according to data from the Hong Kong Census and Statistics Department. Still, the amount in the first 11 months of the year has more than doubled to 1,017 tons, the data show.
Bullion fell 28 percent this year, set for the worst slump in three decades, as the Federal Reserve said it would taper stimulus. The price is set for the first annual drop in 13 years as some investors lose faith in the precious metal as a store of value amid a record rally in U.S. equities. Gold holdings in exchange-traded products slumped 33 percent this year.
“As bets on higher prices diminish, Chinese investors’ appetite for bullion seemed to be waning,” said Jiang Shu, a senior analyst at Industrial Bank Co. in Shanghai. “Anecdotal evidence from retailers here also presented the same picture that sales in the second half of this year weren’t as brisk as in the first half.”
The metal for immediate delivery in London traded at $1,201.45 an ounce at 2:26 p.m. Shanghai time, down 4.2 percent this month after a 5.3 percent drop in November. The price tumbled to a 34-month low of $1,180.50 on June 28. Bullion of 99.99 percent purity on the Shanghai Gold Exchange fell 6.7 percent last month, declining for a third month.
Gold, iron ore, soybeans and copper may drop at least 15 percent next year, Goldman Sachs Group Inc. said last month. Bullion has fallen 38 percent from a record $1,921.15 in 2011.
China is on course to overtake India as the world’s biggest bullion consumer as demand reaches 1,000 tons this year, according to the World Gold Council.
China’s demand for jewelry, bars and coins rose 30 percent to 996.3 tons in the 12 months through September, while usage in India gained 24 percent to 977.6 tons, according to the London-based WGC. While analysts in a Bloomberg News survey see consumption easing 2.4 percent in 2014 from a record 1,000 tons in 2013, purchases will still exceed those of any other nation and the U.S., Europe and the Middle East combined.
The mainland bought 107.4 tons last month, including scrap, compared with 147.9 tons a month earlier, such figures from the Hong Kong government showed. China’s purchases in November were 18 percent higher than the 90.8 tons a year earlier, according to the Hong Kong data. Mainland China doesn’t publish such data.
Exports to Hong Kong from China were 46.4 tons in November, according to a separate statement from the Statistics Department. That compares with 18 tons in October and 29 tons in November 2012.
— With assistance by Feiwen Rong