Switzerland's physical gold exports head for Asia - customs data

By Jan Harvey

LONDON (Reuters) - The top five recipients of Swiss gold exports in January were in Asia, with Hong Kong the top destination for shipments out of Europe's leading refining centre, data from the Swiss customs office showed on Thursday.

Hong Kong received 3.073 billion Swiss francs' worth of gold last month, or 44.3 percent of total exports by value, the data showed. India, Singapore, the United Arab Emirates and China made up the rest of the top five destinations.

The main source of Swiss gold imports was the United Kingdom, which accounted for 60 percent of gold imports by value. London is a major vaulting centre for investment-grade bullion, which was sold heavily last year.

Separate Swiss customs data showed gold flows into and out of Switzerland jumped last year, in what analysts say is likely to be the latest evidence of metal moving from U.S. and European investment funds to Asian consumers.

Exports of the metal from Switzerland jumped 77 percent to 2,777.14 tonnes last year, the data showed, while imports climbed by more than a third to 3,060.66 tonnes.

Investors last year liquidated 881 tonnes of gold from exchange-traded funds, which issue securities backed by physical metal, according to World Gold Council and Thomson Reuters GFMS data released earlier this week.

Holdings of the largest gold-backed ETF, New York-listed SPDR Gold Shares, fell more than 550 tonnes.

Meanwhile, demand soared to record levels in China and rose sharply in Turkey, Egypt, Japan and India, despite tough import restrictions in the latter, historically the world's biggest bullion consumer.

While the statistics office does not provide data on the source or destination of its gold shipments by volume, analysts say outflows from ETFs are likely to have fed this demand via Switzerland.

"A lot of metal was migrating (last year) from Europe and North America, not least from the SPDR and similar funds, to the Middle East, the Far East, and to some extent South Asia," said Rhona O'Connell, head of metals research at consultancy Thomson Reuters GFMS.

"Metal coming out of the ETFs and to some extent the over-the-counter market would have been large 400-ounce bars. They would have been going through refineries, predominantly in Switzerland, for conversion into kilobars or smaller."

Gold held to back the SPDR ETF is stored in 400-ounce bars in HSBC's vaults in London, according to the fund's prospectus.

In a note earlier this week, Australian bank Macquarie, citing trade data from EU statistics agency Eurostat, said the UK exported 1,739 tonnes of gold in 2013, with the vast majority sent to Switzerland.

This is more than 10 times higher than in 2012, it said. "We believe this largely reflects investor liquidation, and that much of it eventually found its way to China," Macquarie said.

(Reporting by Jan Harvey; Editing by Dale Hudson)