Author: Lawrence Williams
Posted: Wednesday , 08 Feb 2012
China continues to see rising gold consumption with a virtual tripling of gold imports through Hong Kong in 2011, but demand in December appears to have stuttered ahead of the Lunar New Year.
CAPE TOWN -
Official statistics showed a huge rise in Chinese gold imports through Hong Kong in 2011, reaching just under 428 tonnes, an increase of around 260%, but the effects on the gold price were probably tempered by figures which showed that December imports by this route, ahead of the Chinese New Year, were substantially lower than a year earlier at 38.6 tonnes, a fall of over 60% year on year, despite the relatively weak gold price during that month.
The increase led to the usual speculation that perhaps the rise was in part due to off-the-record purchases for official reserves with the continuing theory that China government entities are buying on dips to exert a degree of control over the price as well as raise its reserves surreptitiously. This is done by putting the purchases into a 'holding pot' which means it does not actually appear in the country's official Central Bank's gold holding figures until it is deemed politically expedient to make such an announcement and transfer the gold to its official reserves.
With China's official gold output, the world's largest, announced at around 361 tonnes, but here again believed to be perhaps rather higher than this as reported figures are reckoned to only show a part of the overall picture (although a major sector of it) - see China's gold output and demand could be far greater than ‘official' data suggest.
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