China's net gold imports via Hong Kong surged to a six-month high in September, helped by a recovery in demand as economic activity picked up in the world's top consumer of the metal, though they remained lower year-on-year.
Net gold imports via Hong Kong to China stood at 11.113 tonnes, compared with just 1.184 tonnes in August, data from the Hong Kong Census and Statistics Department showed on Tuesday. They were 6.1% lower than in September 2019.
Total gold imports via Hong Kong hit their highest since December 2019, at 16.14 tonnes.
Consumption has risen and lower domestic output may be driving imports higher, said Bernard Sin, regional director for Greater China at MKS. He also referred to a decision by the People's Bank of China to ease restrictions on gold imports.
"Chinese banks (are) having import quotas... issued by the PBOC - they will need to utilise (those)," he said.
Underpinning the sharp recovery in imports from earlier in the year, China's gold consumption rose 28.7% in the July-September period from the previous quarter, the China Gold Association said.
"The rebound is normal considering China's economy is recovering - jewellery demand is also recovering. But total demand is still lower in the third quarter compared to a year before," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
"Demand in the fourth quarter should be higher considering it is a seasonally strong period for consumption."
Consumption was 8.2% lower than the same period last year, with Chinese gold still being sold at hefty discounts against international spot prices, a situation that has prevailed since February.
The Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing.
(Reporting by Nakul Iyer and Eileen Soreng in Bengaluru, additional reporting by Arpan Varghese; Editing by Kirsten Donovan, Susan Fenton and Jan Harvey) ((nakul.iyer@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 0417; Reuters Messaging: nakul.iyer.thomsonreuters.com@reuters.net))
