China's gold imports from Hong Kong drop to eight-month low

By A. Ananthalakshmi

SINGAPORE (Reuters) - China's net gold imports from main conduit Hong Kong fell to an eight-month low in April, data showed on Thursday, as demand for the precious metal eased amid robust equities.

Net gold imports from Hong Kong dipped to 52.204 tonnes in April, from 66.363 tonnes in March, according to data emailed to Reuters by the Hong Kong Census and Statistics Department. April imports were the lowest since August last year.

China was the world's top consumer of gold in the first quarter of the year, and the second largest in 2014 after India, according to the World Gold Council.

Rallying stock markets in China have taken some shine off gold's appeal as an investment this year. The CSI300 index of the largest listed companies in Shanghai and Shenzhen has gained over 35 percent this year.

Gold prices so far in 2015 have barely moved, holding on to losses from the last two years.

"How long China's stock markets can continue to rise is anyone's guess, but while investment alternatives are clearly outpacing gold, investment appeal for the latter will suffer," ANZ analyst Victor Thianpiriya said in a note on Thursday.

"The implication is that imports are likely to remain soft this year," he said.

Bearish outlook on bullion prices and an anti-corruption drive have also slowed gold purchases in China. The anti-graft drive has hurt sales of luxury items in China and Hong Kong.

China's consumption of jewellery, bars and coins fell 7 percent to 272.9 tonnes in the first quarter though it was still ahead of India, according to data from the World Gold Council released earlier this month.

Demand in the beginning of the year is typically strong due to the Lunar New Year, when gold is bought to be given as gifts, but tends to taper off after the holiday.

China does not provide official trade data on gold, so the Hong Kong figures serve as a proxy for flows to the mainland.

However, the Hong Kong data does not provide a full picture of Chinese purchases as imports also come directly through Shanghai and Beijing and there are no official figures for those shipments.

(Editing by Himani Sarkar)