* China net May gold imports from Hong Kong 52.606 T vs
April's 67.040 T
* Falling yuan saps demand for gold
(Adds milestone and dealer's comments)
By Lewa Pardomuan
SINGAPORE, June 26 China's gold imports from
Hong Kong dropped in May to the lowest level since January last
year as a weaker yuan curbed appetite for the precious metal in
the world's largest consumer.
Hong Kong has been the main conduit for gold into China, but
imports into the mainland have been increasingly shipped
directly to Shanghai and Beijing, helping shroud the actual
amount of the metal that enters the country.
As China does not report gold trade data, the Hong Kong
figures are still the main route to gauge demand for the
precious metal in the mainland.
Net gold inflows into China from Hong Kong fell 22 percent
to 52.606 tonnes in May from 67.040 tonnes in April, according
to data e-mailed to Reuters by the Hong Kong Census and
That was the smallest import volume to China via Hong Kong
since January 2013. It was the third straight month that imports
"I think the main reason is because the yuan is depreciating
and also at that time, Shanghai gold futures traded at a
discount to the cash prices in London," said a physical dealer
in Hong Kong.
"The anti-corruption drive may also play a role. People are
not keen to show off their wealth and sales of luxury goods were
not so good," the dealer said.
Total gold imports into China from Hong Kong dropped to
67.233 tonnes last month from 80.817 tonnes in April, the data
Chinese banks imported a record 1,158.162 tonnes of gold
from Hong Kong last year, when gold prices fell for the first
time in 13 years.
Demand has now cooled from peak levels. That, combined with
a weaker yuan, has driven Chinese gold prices to a discount to
the global benchmark.
Spot gold has recovered from last year's rout,
gaining nearly 9 percent this year to trade above $1,300 an
ounce amid a shaky global economy and geopolitical risks.
The renminbi has lost 2.7 percent against the dollar so far
this year as the central bank flushed out speculators, becoming
one the worst players among its emerging market peers.
Chinese gold processing firms have since 2012 used falsified
gold transactions to borrow 94.4 billion yuan ($15.2 billion)
from banks, the country's chief auditor said.
Chinese firms could have locked up as much as 1,000 tonnes
of gold in financing deals by the end of 2013, the World Gold
Council said in April, indicating a big slice of imports has
been used to raise funds due to tight credit conditions, rather
than to meet consumer demand.
($1 = 6.2090 Chinese Yuan Renminbi)
(Additional reporting by Manolo Serapio Jr; Editing by