Mainland China Imports over 100,000 kg of gold From Hong Kong in April

The flow of gold into China hit a record level of 102,525 kg in April according to reports issued from the Hong Kong government.

That is the second highest monthly import totals on record. The all-time record is 102,525 kg imported in November, 2011.

Also in April, the Chinese export of gold into Hong Kong was 34,368 kg of gold. That creates a net import of 67,400 kg, a 77 percent change, for China.

First quarter gold information from Hong Kong and its Chinese trading partner show 237,287 kg were sent to the mainland. Only 70,688 kg were sent back.

China imports most of the gold it receives through the ports at Hong Kong. Chinese authorities are close-mouthed about how gold is being used. The last announcement of China’s official gold holdings was four years ago. Speculation is the government is hoarding gold.

The new Chinese middle class is a large market for gold as many of them are using the precious metal as a tangible investment.

The World Gold Council says China accounts for 30 percent of the world’s gold jewelry demand. The Council also says China is on track to be the world’s largest gold market for 2012.

Demand and Prices

Overall gold demand, based on prices, remained stable in March and April despite the increase in Chinese imports. Part of that can be attributed to a 46 percent decline in India’s buying gold for investment purposes. Jewelry demand in that nation was also off 19 percent.

The drop in Indian demand and the Chinese increase in gold demand likely contributed to the stability in the gold rate in the first quarter. Prices in May began to slide and by mid-month, the gold rate was down five percent from the first quarter high.

Whether that slide will stay remains to be seen. With China apparently stepping up its gold demand, prices may rise again.

The World Gold Council is predicting China will import between 900 and 1,000 metric tons this year. If that happens, which would be another import record, prices will likely remain over the $1,500 mark and may get back to $1,600 by the summer.

AngloGold predicts the price for gold could rise to over $2,000 by the end of the year because of Chinese and Indian demand. Gold mining efforts are stepping up around globe in response to the increased demand.
Chinese and Indian demand is one of the chief reasons behind the current gold rate.

The World Gold Council is predicting China and India could account for half the world’s gold demand within the next few years, with both taking the leader role from time to time.

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