Metals Focus: Swiss Data Point To Soft Gold Demand In Many Markets
(Kitco News) - Swiss trade data show thatphysical gold demand in many key nations has been soft so far this year, said MetalsFocus.
Switzerland is a majorgold-refining hub, thus the country’s trade statistics are closely monitored asa barometer for global physical demand.
Switzerland’s gold exportsrose by 2% year-on-year to 478 tonnes from January through April.
“However, this growth isalmost entirely driven by robust growth in China. Excluding that country, Swissexports were actually down by almost a third,” Metals Focus said in a reportreleased Wednesday.
Further, combinedshipments to Hong Kong and mainland China were 43 tonnes in April, down by 46%from the prior month and the lowest level since October, Metals Focus said.
During the first fourmonths of 2018, Swiss exports to the region totaled 172 tonnes, up 65% year-on-year,Metals Focus said. However, the consultancy explained, the “dramatic” rise wasdue to a weak comparison level from a year ago.
“It is worth stressingthat part of these gains came as a result of the tightening regulations on goldbullion imports imposed by the Chinese central bank in 2017, which led to atemporary slowdown in Chinese imports early in the year,” the consultancy continued.
One positive for physicalgold demand, however, is that Chinese gold-jewelry consumption has picked up,analysts said. First-quarter buying was 7% higher than the same period a yearago.
Meanwhile, Swiss goldexports to India totaled 80 tonnes from January to April, which Metals Focusnoted was less than half of the total from the same period in 2017.
“A number of factorscontributed to this hefty fall. First, Indian bullion imports in H1.17 wereboosted by stock replenishments by the trade ahead of the introduction of theGST [goods and services tax],” Metals Focus says. “Second, both jewelry salesand retail investment posted lower volumes in Q1.18.
“That said, feedback fromthe industry has confirmed a pick-up in demand in April, while the local marketalso moved to a modest premium over the London price. Indeed, most jewelers werecently spoke to confirmed higher sales y/y on Akshaya Tritiya, one of themost auspicious days to buy gold in India.”
Swiss shipments to otherkey physical gold markets have been generally lower so far this year, MetalsFocus said. Weakness in the Middle East was the result of poor economicconditions, and there has been softer demand for gold bars among Europeanretail investors, the consultancy said.
“Finally, it is worthnoting that Swiss exports to the U.K. remained low at 7 [tonnes], highlightinglackluster interest in the yellow metal among institutional investors,” MetalsFocus said.
Metals Focus also notedthat January-April imports into Switzerland were down by over 30% from theprior year to 443 tonnes.
By Allen SykoraFor Kitco News
Follow @AllenSykora
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