China's monthly net gold imports via main conduit Hong Kong plunged 38.3 percent in January, data showed on Monday. Net gold imports by the world's top consumer fell to 31.79 tonnes in January from 51.51 tonnes in December, according to data emailed to Reuters by the Hong Kong Census and Statistics Department. January's figures are the lowest since August 2014, when net gold imports had touched about 28 tonnes.
Total gold imports fell to 33.62 tonnes in January from 68.15 tonnes in December. "The fall was mostly due to overstocking in December," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "Also, towards the end of January was the Chinese New Year so there was not much buying with most of the factories down for the holiday," Leung said, adding that higher prices were another reason to keep buyers at bay.
Spot gold had rallied over five percent in January, registering its strongest month since June, supported by political uncertainty. Gold demand in Asia remained sluggish last week as a price rally on political concerns and dollar weakness kept buyers on the sidelines. China allows only 13 banks, including three foreign lenders, to import gold, according to the Shanghai Gold Exchange.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.