China’s back on gold-buying spree, opens borders to $8.5 BILLION worth of shiny metal – reports

China’s back on gold-buying spree, opens borders to $8.5 BILLION worth of shiny metal – reports

The world’s biggest gold consumer, China, has given domestic and international banks permission to import large amounts of gold into the country, Reuters reported, citing its sources.

People familiar with the matter told the media that the nation’s central bank controls how much gold enters China through a system of quotas given to commercial banks. It usually allows enough metal in to satisfy local demand but sometimes restricts the flow. In recent weeks the regulator has given permission for large amounts of bullion to enter, the sources said.

“We had no quotas for a while. Now we are getting them… the most since 2019,” said a source at one of the banks moving gold into China.

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The sources also said that around 150 tons of gold worth $8.5 billion at current prices are likely to be shipped. They added that the bullion could be shipped in April or May. The bulk of China’s gold imports typically come from Australia, South Africa and Switzerland.

Chinese customs data show that since February 2020, the country has on average imported gold worth around $600 million a month, or roughly 10 tons. In 2019 its imports stood at about $3.5 billion a month, or roughly 75 tons.

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The dramatic return to the global bullion market follows a strong rebound of the country’s economy since the second half of last year. The Chinese appetite for gold jewelry, bars and coins has also recovered, and since January domestic prices have been higher than global benchmark rates, making it profitable to import bullion.

According to Standard Chartered analyst Suki Cooper, the recovery of gold demand in China and India is “critical in setting the floor for gold” and should stop prices from falling further over the coming months.

For more stories on economy & finance visit RT’s business section

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