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China’s gold import surge

December 20, 2013

ft.com

The Chinese state could be behind a surge in bullion imports that will see China overtake India as the world’s largest consumer of gold, according to one of the sector’s most influential investors.

Evy Hambro, chief investment officer of BlackRock’s Natural Resources Equity team, said the investment community had been surprised by the amount of gold flowing into China given its position as the world’s biggest gold producer.

“The total amount of gold being consumed in China is a gigantic quantum and you have to wonder where that gold is going,” he said in an interview with the Financial Times. “Is it going on to wrists, ears and necks or is it going into state reserves?”

The People’s Bank of China has not provided an update on its bullion reserves since 2009, when it reported a holding of 1,054 tonnes. But the suspicion among some analysts is that China’s central bank has purchased up to 300 tonnes of gold this year.

If there was “clarity” on imports, Mr Hambro said it could provide a prop for the gold price, which has fallen sharply this year.

“I think we will need some clarity and that will really set the tone for gold in China in 2014,” he said. ”If it does start to show that some of it has gone into state hands that will be very supportive for the gold market.”

Bullion has lost more than a quarter of its value this year, falling from

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