China Gold Imports Drop for Fifth Month on Weak Demand

China’s gold imports from Hong Kong in July fell by 42 percent from a month earlier as an anti-corruption campaign and price declines deterred Chinese consumers.

Net imports totaled 21.1 metric tons, compared with 36.4 tons in June and 113.2 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to Hong Kong from China fell to 17.9 tons last month from 19.7 tons in June, the statistics department said in a separate statement. Mainland China doesn’t publish such data.

The continued weakness adds to signs of slowing demand in China, which in 2013 overtook India as the biggest user after gold entered a bear market, spurring a buying frenzy among Chinese consumers. President Xi Jinping’s anti-graft drive this year hurt demand for luxury goods, according to the World Gold Council. Prices fell by the most since December last month amid bearish forecasts from banks including Goldman Sachs Group Inc.

“All signs continued to show that gold demand really fell victim to the weak consumer demand,” Liu Xu, an analyst at Capital Futures Co. in Beijing, said before the data came out.

China’s consumption plunged 52 percent to 192.5 tons in the second quarter this year from a year earlier as buyers purchases fewer bars, coins and jewelry amid a clampdown on corruption, the London-based council said in an Aug. 14 report.

Gold will drop to $1,050 an ounce by the end of 2014 as the U.S. recovery accelerates, according to Goldman.

Bullion for immediate delivery in London fell 0.3 percent to $1,277.86 an ounce at 5:21 p.m. Beijing time, according to Bloomberg generic pricing. Prices are down 0.4 percent this month after losing 3.4 percent last month. Bullion of 99.99 percent purity on the Shanghai Gold Exchange fell 1.6 percent in July.

Mainland Chinese buyers purchased a total 38.9 tons in July including scrap, compared with 56.1 tons in June and 129.2 tons a year earlier, data from the Hong Kong government showed.

— With assistance by Feiwen Rong

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