China’s Gold Imports From Hong Kong Drop as Yuan Rate Swings

June 27, 2014 Posted by admin

China’s gold imports from Hong Kong
fell 20 percent in May from a month earlier as increasing
volatility in the Chinese currency made the precious metal less
appealing to local investors.

Net imports totaled 52.3 metric tons last month, compared
with 65.4 tons in April and 106 tons a year ago, 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 14.9 tons in May from 15.4 tons in April, the
statistics department said in a separate statement. Mainland
China doesn’t publish such data.

China’s yuan had its first monthly gain this year in May as
investors bet that the government would take more steps to
revive economic growth. Lower bullion demand from China, which
surpassed India as the biggest gold consumer last year, may
weigh on prices that have increased this year also on haven
demand amid tension in Ukraine and Iraq.

“The increased volatility in the foreign exchange rate
deterred gold importers because it raised the cost to hedge
against currency risk,” said Liu Xu, a senior analyst at
Capital Futures Co. in Beijing.

Goldman Sachs Group Inc. forecast in April the precious
metal may extend declines after a 28 percent drop in 2013, the
most in three decades. Holdings in bullion-backed exchange-traded products are near the lowest since 2009.

The yuan rose 0.2 percent in May, after losing 3.4 percent
in the first four months of 2014, China Foreign Exchange Trade
System prices show.

Bullion for immediate delivery in London fell 0.6 percent
to $1,311.66 an ounce at 5:40 p.m. Beijing time, according to
Bloomberg generic pricing. Bullion of 99.99 percent purity on
the Shanghai Gold Exchange fell 2.9 percent in May.

Mainland Chinese buyers purchased a total 67.2 tons in May,
including scrap, compared with 80.8 tons in April and 127 tons a
year earlier, data from the Hong Kong government showed.

To contact Bloomberg News staff for this story:
Feiwen Rong in Beijing at;
Janet Ong in Hong Kong at

To contact the editors responsible for this story:
Brett Miller at
Jarrett Banks

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