The price of gold imports via Hong Kong fell by 1.7% approximately in May and is still dropping. As far as the reason is concerned, it is the top consumer’s economy that was seen weighing on retail demand for jewelry.
The report of Hong Kong Census and Statistics Department data showed on Tuesday (June 27)- indicated the net imports into the world’s top gold consumer stood at 49.056 tonnes in May compared with 49.906 tonnes in April.
It impacts total gold imports via Hong Kong, which was 3.5% at 51.722 tonnes from 53.581 tonnes in April.
“The decline in gold imports via Hong Kong comes as no surprise given that China’s economic recovery is clearly faltering and with its demand for luxury items such as gold jewelry,” said independent analyst Ross Norman.
As a result, several major banks have slashed their 2023 GDP forecasts for China after a trembled post-Covid recovery data was shown.
Debajit Saha, lead metals analyst at LSEG said that- China’s net gold imports via Hong Kong could drop 7-8% in the second half of the year.
“Consumers may prefer to go for a comparatively low-ticket purchase than the high-value ones which Chinese consumers were known for before the pandemic,” Saha added.
However, it is a one-sided picture given by Hong Kong data about Chinese purchases as gold is also imported via Shanghai and Beijing, so the settlement in those areas could be different.
To which Norman replied in a possible manner that, “temporary setback for bullion given expectations that China will implement policies to stimulate broad economic growth.”
Still, some hope is left as Chinese Premier Li Qiang on Tuesday said Beijing would take considerable steps to stimulate demand and revitalize markets.
Last month’s index of physical gold prices in China swung between US $4 discounts and US $9 premiums to global spot prices which bolstered from as much as US $2072 per ounce in early May to as low as US $1931 by end-May.
- Published By Team Hongkong Journalist