October 8, 2013 / 10:25 AM / 4 years ago

UPDATE 1-China's gold imports from Hong Kong remain above 100 tonnes in August

(Adds details, analyst comments)

SINGAPORE, Oct 8 (Reuters) - China’s net gold purchases from Hong Kong fell 5 percent in August from the previous month, but were still above 100 tonnes for a fourth straight month, as strong demand for jewellery and bars persisted in the world’s second-biggest bullion consumer.

Net gold flows into China - excluding imports by Hong Kong from China - hit 110.505 tonnes in August, compared with 116.385 tonnes in July, data from the Hong Kong Census and Statistics Department showed.

Total imports from Hong Kong rose to 131.374 tonnes from 129.232 tonnes a month ago.

“These are very strong numbers again. Gold demand from China remains brisk, offsetting weak demand in the West and confirming the shift in gold demand from West to East,” said Carsten Fritsch, an analyst at Commerzbank.

Fritsch said China’s consumption could stay above the 100 tonne mark in the coming months.

Chinese demand has been very strong this year, offsetting to an extent record outflows from gold-backed exchange-traded products. Many in the market expect China to overtake India as the biggest gold consumer.

China’s net gold imports from Hong Kong have totalled 744.818 tonnes for the first eight months of the year, while India’s purchases as of August stand at a little less than 600 tonnes.

China’s net gold imports from Hong Kong hit a record high of 136.185 tonnes in March before slipping in April due to a supply crunch.

China does not publish gold trade data. The numbers from Hong Kong - a main conduit for gold into China - give the best picture of the country’s trade of the precious metal.

Gold has lost nearly a fifth of its value this year on fears of an end to the U.S. Federal Reserve’s stimulus measures.

Prices, however, had gained nearly 6 percent in August as geopolitical tensions in Syria mounted, burnishing the metal’s safe-haven appeal. The rise in prices could have prompted the small dip in Chinese imports month-on-month.

Chinese banks that import gold also face a quota restriction imposed by the central bank.

In a draft policy document issued last month, China’s central bank said it was planning to increase the number of firms allowed to import and export gold - a move that could further increase gold imports.

Reporting by A. Ananthalakshmi; Editing by Clarence Fernandez & Kim Coghill

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