Hong Kong-to-China Gold Flow Hits Record High

Rujun Shen

Hong Kong's net gold flow to mainland China jumped 47% in 2012 to a record high of 557.478 tonnes, indicating robust demand in China, which vies with India to be the world's top gold consumer.

Hong Kong shipped 114.372 tonnes of gold to China in December, also a record high for monthly exports.

Its total gold shipments to China in 2012 jumped 94% from the 2011 total to over 832 tonnes, but imports also were six times higher at 274.684 tonnes.

"It is not a surprise," said Dan Smith, head of metals research at Standard Chartered. "Consumer and investment appetite was quite strong, and no one knows how much the central bank is buying."

Investors are waiting for a research report from the World Gold Council due next week, which will show whether China overtook India last year as the world's top gold consumer.

The implied demand could reach 1,050 tonnes if gold inflow from other channels is factored in.

China produced 322.8 tonnes of gold in the first ten months of 2012, up 11% from a year earlier.

Physical buying at the start of 2013 was strong as seasonal demand picked up before the Lunar New Year, which falls on February 10. But buying has since ebbed as prices moved higher and settled in a rangebound mode.

Source: reuters