China Gold Demand Drops but Expected to Pick Up in H2

Although mainland China’s gold imports from Hong Kong fell in June, analysts expect imports from the Far East to increase in the coming months. Data released from the Hong Kong Census and Statistics Department showed that China’s imports via Hong Kong fell by 48% month over month, and by 8% year over year, to the lowest level since August 2014, says Simona Gambarini, commodities economist for U.K.-based research firm Capital Economics.

She adds that this data suggests that gold’s price drop still has to feed through into higher buying. “However, we expect total imports by China and India to pick up in the second half of the year as low prices attract a fresh wave of buying,” she says. Gambarini adds that the Swiss Federal Customs Administration also revealed that China’s imports via Switzerland fell in June by 25% month over month, but are up 368% year over year.

“We think investors are becoming increasingly worried about a more pronounced correction in China’s stock market and will return to gold to diversify their portfolios,” she notes. As such, she adds that the firm expects an overall increase in consumer demand of 4% from India and 3% from China year over year.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza