Chinese Gold Imports Hit Highest Level Since 2018

The comments below are an edited and abridged synopsis of an article by Schiffgold

China, the world’s biggest gold consumer, imported 1,343 tons of gold in 2022, the highest since 2018. Total gold imports for the year were up 64% over 2021.

Chinese Gold Imports Hit Highest Level Since 2018 - BullionBuzz - Nick's Top Six
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Gold demand in China picked up during the last half 2022; 157 tons of gold were imported in December to close out a strong H2.

Strength in the Chinese gold market continued into January. The Shanghai-London gold price premium charted a rebound, ending a declining trend. Stronger gold demand during January was key.

During the 15-day period from the Chinese New Year to the Spring Lantern Festival, gold consumption was up by 18% year-on-year.

Gold withdrawals from the Shanghai Gold Exchange totaled 140 tons in January. That was a modest month-on-month decline of 2 tons and 25% lower than January 2022. But the lower number was primarily due to the 2023 Chinese New Year holiday that limited January to just 16 trading days. When compared with previous Chinese New Year months, January’s withdrawal total was 12% higher than the 10-year average.

The People’s Bank of China resumed official gold purchases in November. That continued into January, with the Chinese central bank adding another 15 tons to reserves. Gold now accounts for 3.7% of China’s total reserves.

The PBOC accumulated 1,448 tons of gold between 2002 and 2019, and then suddenly went silent. Many speculate that China continued to buy gold during those silent years.

There is speculation that China holds more gold than it officially reveals, and that it keeps several thousand tons of gold in a separate entity called the State Administration for Foreign Exchange (SAFE).

If this trend in the Chinese gold market continues, it will drive overall global gold demand higher. Gold demand grew by 18% to 4,741 tons in 2022, the highest in eleven years.

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