Chinese Consumers Take Advantage Of November's Low Gold Prices As Imports Rise

(Kitco News) - Gold prices appear to be ending the year in neutral territory, and Asian demand continues to be the bright spot within the marketplace.

Monday, Reuters reported that China’s gold imports from Hong Kong in November rose to their highest level since February. Analysts have expected to see strong demand for the yellow metal in Asia, as the Lunar New Year approaches. This year Lunar New Year will be celebrated Feb. 18 and gold is given as a traditional gift during the holiday.

The rise in imports also coincides with gold prices dropping to their lowest point in four-and-a-half years. On Nov. 7 Comex December gold futures dropped to a low of 1,130.40.

In a recent interview with Kitco News, Victor Thianpiriya, commodity strategist at ANZ Bank, one of the first international banks to be allowed to import gold into China, explained that gold imports have been relatively low throughout 2014 because there was already a large stockpile in China from 2013.

However, with most of the stockpiles being depleted, he said that he is expecting to see a pickup in Chinese imports in 2015. He noted that increased imports in 2015 should help to stabilize gold prices.

Thianpiriya also said lower prices could have a limited impact on Asian gold demand in the near-term. Prices would probably have to fall to $1,000 an ounce before consumers started buying gold in large quantities, similar to 2013, he said.

He explained that investors are waiting for the gold market to resume its uptrend before jumping back into the market.

Currently, Comex February gold future prices are hovering around the $1,200 an ounce area. As of 9:17 a.m. EST, February gold was trading at $1,197.20 an ounce. Steve Scacalossi, director, head of sales of global metals at TD Securities said in a research note Tuesday, the news of continued demand out of China is helping to stabilize the gold market as it closes out the year.

Courtesy: Kitco News