China's net gold imports from main conduit Hong Kong fell to a 10-month low in June, data showed on Monday, reflecting weak demand from the major consuming nation. Net gold imports from Hong Kong slid to 37.146 tonnes last month from 70.846 tonnes in May, according to data emailed to Reuters by the Hong Kong Census and Statistics Department. Total gold imports via Hong Kong stood at 47.861 tonnes.
The sharp drop in gold imports came as Chinese investors poured funds into equities that lifted markets to multi-year highs in June before pulling back this month. "People were not interested in gold at that time and the strong dollar also dampened interest," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. Whether last week's slump in gold prices to a 5-1/2-year low of $1,077 an ounce spurs renewed buying remains to be seen, he said.
"The price drop offers some incentive for people to buy, but with the Chinese economy slowing, people can't make money so how do they buy gold?" China was the world's biggest gold consumer in the first quarter of this year and the second largest in 2014, after India, according to the World Gold Council. China does not provide official trade data on gold, so the Hong Kong figures serve as a proxy for flows to the mainland. The Hong Kong data, however, does not provide a full picture as Chinese imports also come directly through Shanghai and Beijing. China said earlier this month that its gold reserves stood at 1,658 tonnes at the end of June, 57 percent more than the last time it disclosed its reserves in 2009, and far less than market estimates.
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