China’s Gold Imports Seen by Wing Fung Stabilizing Next Year

China’s gold imports from Hong Kong in 2015 may hold around this year’s levels as physical demand in the world’s biggest consumer remains stable and as the country considers easing restrictions on imports.

Net imports have slumped 32 percent to 692 metric tons from January through November compared to the same period last year, according to Bloomberg calculations based on data from the Hong Kong Census and Statistics Department yesterday. The figures don’t represent all imports of the metal by China, which doesn’t publish such data.

Prices are headed for a second annual loss after plunging by the most in three decades last year as the dollar’s rally and a surge in equities cut demand for the precious metal as a store of value. China’s demand may total as much as 950 tons this year, down from last year’s record 1,275.1 tons, Albert Cheng, managing director for Far East region at the World Gold Council, said Dec. 3. Demand this year held up compared with a long-term trend and is higher than 2012 levels, he said.

“Physical gold demand is actually really stable and there is no reason the Chinese people, whether rich or poor, will change their preferences for gold as gifts,” said Mark To, head of research at Wing Fung Financial Group, a trader and refiner in Hong Kong. “You can see that investors realize the time has changed and there is no more liquidity-induced speculation.”

China is said to be considering easing restrictions on gold imports. The nation began offering international institutions access to yuan-based gold contracts in Shanghai’s free-trade zone in September in a move seen as an effort to extend its influence over prices.

Gold for immediate delivery in London rose 0.4 percent to $1,188.34 an ounce at 1:20 p.m. in Hong Kong, according to Bloomberg generic pricing. Bullion of 99.99 percent purity on the Shanghai Gold Exchange is up 0.7 percent this year.

China’s net imports totaled 87.2 metric tons in November, the highest since February, according to Bloomberg calculations based on data from the Hong Kong Census.

Mainland China imported 149.3 tons last month, including scrap, compared with 111.4 tons in October and 107.4 tons a year earlier, data from the Hong Kong government showed.

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