China's June net gold imports via Hong Kong jump to 15-month high

(Reuters) - China’s net gold imports via main conduit Hong Kong jumped 40.3 percent in June from the previous month to their highest since March 2017, data showed on Thursday.

Imports via Hong Kong, by the world’s top consumer of the metal, rose to 80.867 tonnes in June from 57.649 tonnes in May according to data provided to Reuters by the Hong Kong Census and Statistics Department.

It is the highest level of imports since 111.647 tonnes reported in March 2017.

Total gold imports via Hong Kong rose about 42 percent to 88.608 tonnes in June from 62.386 tonnes in May.

Both total and net imports in June rose for a second straight month.

(For a graphic on 'China gold imports via Hong Kong' click

“Not only gold imported from Hong Kong, imports from Switzerland and U.K also increased too,” GFMS analyst Samson Li said.

China imported 604.90 tonnes from Hong Kong, Switzerland, Australia, Singapore and United Kingdom in the first five months this year, 21 percent more year-on-year, Li said.

“As import volume increased, it looks like banks are going to use up their import quota faster than last year’s ... Maybe they want to take the arbitrage profit while opportunity still lasts.”

Earlier this month, Switzerland’s customs bureau reported that gold shipments to China, Switzerland’s biggest export destination for gold, surged to 61.3 tonnes in June, up 52 percent year on year and the highest since February.

Gold prices have fallen for the past four straight months, with June recording a 3.5 percent drop, its biggest monthly drop since November 2016. Prices have fallen 1.9 percent so far in July. [GOL/]

“Prices have come down quite a bit, which is driving the demand for physical gold ... The demand is also driven by the ongoing trade spat between China and the United States,” Brian Lan, managing director at dealer GoldSilver Central in Singapore, said.

Bullion is often seen as an alternative investment during times of political and financial uncertainty.

China does not provide trade data on gold, and the Hong Kong figures serve as a proxy for flows to the mainland.

The Hong Kong data, however, might not provide a full picture of Chinese purchases as gold is also imported via Shanghai and Beijing.

Reporting by Nallur Sethuraman in Bengaluru; Editing by Sunil Nair. Editing by Jane Merriman