China’s Gold Imports from Hong Kong Increase on Import Quotas

China’s gold imports from Hong Kong rose in February amid increasing demand and as the country allowed more banks to import the precious metal.

Net imports totalled 109.2 metric tons last month, compared with 83.6 tons in January and 60.9 tons a year earlier, according to calculations based on data from the Hong Kong Census and Statistics Department on 25 March. Exports to Hong Kong from China fell to 15.8 tons in February from 19 tons in January, the Statistics Department said in a separate statement. Mainland China doesn’t publish such data.

Bullion is up 9.1 percent in 2014 on rising consumption in Asia and as emerging-market turmoil and signs the U.S. recovery may be faltering boost haven demand. China overtook India as the largest user last year as the biggest price drop in more than three decades spurred purchases, the World Gold Council said last month. China granted licenses for importing gold to Australia & New Zealand Banking Group Ltd., HSBC Holdings Plc and China Everbright Bank Co., Reuters reported in January.

Imports were underpinned by demand from traders using bullion purchases in trade financing deals to obtain short-term bank credit, said Liu Xu, precious metals analyst at Capital Futures Co. in Beijing.

China consumed a record 1,066 tons last year as demand for bars, coins and jewellery jumped 32 percent, the WGC said last month.

Gold holdings in exchange-traded products climbed 6.9 percent in February, the first increase in 14 months. They declined last year for the first time since the product was introduced in 2003.

Bullion for immediate delivery in London rose 0.5 percent to $1,315.21 an ounce. Bullion of 99.99 percent purity on the Shanghai Gold Exchange advanced 6.6 percent in February, posting the second monthly gain.

Mainland Chinese buyers purchased a total 125 tons in February, including scrap, compared with 102.6 tons in January and 97.1 tons a year earlier, data from the Hong Kong government showed.