Signs of a pick-up in Chinese Gold demand – Commerzbank

Data published last week by the Swiss customs authority on Gold exports and the Hong Kong Statistics Department on Gold trade between Hong Kong and China point to a revival in demand for Gold in the Middle Kingdom. Gold shipments from Switzerland to China rose to 17.4 tons in April, the highest level in eleven months, Commerzbank's FX analyst Michael Pfister notes.

China's Gold imports surge to 11-month high in April

"In January and February, they were still at or close to zero, in March at 10 tons. A further 6.1 tons were delivered from Switzerland to Hong Kong, which is considered an import hub for China, also significantly more than in the previous months. The increase in China's Gold imports from Hong Kong is even more pronounced. These amounted to 58.6 tons in April, the highest level in more than a year."

"As far less Gold was shipped from China to Hong Kong at the same time, China's net Gold imports from Hong Kong were considerable for the first time this year at 43.5 tons. In the first three months, there had been net exports totalling 36.2 tons, which was an indication of weak demand. The resulting price discounts compared to the global market price made Gold imports to China unattractive and Gold exports from China attractive."

"This has changed. The lower imports led to a shortage, especially as the World Gold Council reported strong demand from Chinese investors for Gold ETFs in April. As a result, Gold in China recently cost up to $50 per troy ounce more than on the global market. This is likely to have favoured Gold shipments to China."