After a brief recovery gold price dropped back to $1,170 per troy ounce and is trading only marginally above this level this morning, a 6.9 ton inflow into the gold ETFs - the highest daily inflow since the beginning of February - making virtually no difference whatsoever. Meanwhile, Chinese gold demand increased again in May.
According to figures from the Census and Statistics Department of the Hong Kong government, China imported 70.8 tons of gold on a net basis from the former British crown colony last month. This was 36% more than in the month before, 35% more than last May, and the highest net imports in four months. At the same time, it brought the three-month downward trend to an end. Some Chinese traders evidently regarded the price level of around $1,200 per troy ounce as attractive and took advantage of it to step up their purchases, notes Commerzbank.
According to industry sources, jewellery manufacturers have replenished their stocks again. That said, Chinese net gold imports in the first five months of the year are still 18% down on the year-on-year level. Increased Chinese gold demand should lend support to the gold price during the course of the year, says Commerzbank.
