China imported the most gold in nearly a year last month despite record prices, after heightened demand for the precious metal prompted the central bank to ease restrictions on bullion inflows.
Total gold imports to the country reached 127.5 metric tons, a 11-month high, according to customs data released Tuesday. This represents a 73% jump from a month earlier, even after gold hit successive all-time highs, at once point touching $3,500 an ounce.
The rise in imports is likely due to the People’s Bank of China allocating fresh quotas to some commercial banks in April, as the authority responds to strong demand from institutional and retail investors at the height of the trade war. The central bank controls physical bullion flows, typically granting import licenses and quotas only to select banks.
Investors in China turned to gold to hedge against escalating geopolitical uncertainty, which contributed to the metal’s blistering rally earlier this year. While gold has retreated in May with hopes for easing trade tensions, continued central bank buying to diversify away from dollar-denominated assets are seen supporting prices further.
(By Yihui Xie)