SINGAPORE: China's gold imports from Hong Kong in November rose to their highest level since February, indicating strong demand in the world's top bullion consumer ahead of the Lunar New Year.
"Consumer demand is strong because of lower prices," said a trader with one of the 15 importing banks in China.
"There is also some year-end investment demand, and demand for gold leasing." Gold tumbled to a 4-1/2-year low of $1,131.85 an ounce in November, partly due to the strength of the dollar. Although it has recovered slightly, it is still below the $1,200 level, attracting physical buying interest.
The strong imports could also be for stocking-up of inventories ahead of the Chinese New Year in early 2015, when gold is bought for good fortune and to be given as gifts.
Net gold imports from Hong Kong to the mainland rose to 99.111 tonnes in November from 77.628 tonnes in October, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.
Total imports to the mainland, including stocks that are re-exported to Hong Kong, rose to 149.235 tonnes last month from 111.409 tonnes in October.
China does not provide trade data on gold and the Hong Kong figures serve as a proxy for gold flows to the mainland.
The Hong Kong data, however, might not provide a full picture of Chinese purchases as direct imports through Shanghai and Beijing - for which no data is available - have gathered pace this year.
Sustained strong buying from China could boost the price of gold, which is heading for its second annual decline in a row. Demand in the mainland slid by more than a fifth in the first nine months of the year, according to the China Gold Association.
That compares to record purchases last year when gold prices slid after a 12-year rise.
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