According to Reuters sources , China has allowed domestic and international banks to import large amounts of gold into the country. This is likely to support the world gold price after many months of decline.

China is currently the world’s largest gold consumer, with hundreds of tons of gold worth tens of billions of dollars each year. However, the country’s gold imports have fallen sharply recently due to the Covid-19 pandemic and the exhaustion of domestic demand.

With a strong economic recovery in the second half of last year, China’s demand for gold jewelry, bullion and gold coins has increased again. This makes the gold price in China always higher than the world gold price. Therefore, importing gold is a profitable option.

According to the gold traders in Asia, the domestic insurance premium is currently about 7-9 USD / ounce and may increase even more if the amount of gold imports is higher.

According to Reuters sources , about 150 tons of gold worth $ 8.5 billion at current prices are likely to enter China after Beijing’s permission. It is expected that this gold will be imported into China in April and May.

Most of these imports will come from countries such as Australia, South Africa and Switzerland.

The People’s Bank of China is controlling the amount of gold imported into China through the quota system granted to commercial banks. Normally, China will allow gold imports, but sometimes also restrict this flow.

"We have not been granted a quota for a while, and we currently have a quota ... the most since 2019," said one of the banks allowed to import gold from China.

The scale of China’s gold imports signals a strong return China to the global gold bar market. Since February 2020, on average, China has imported about $ 600 million per month in all kinds of gold, or about 10 tons, according to Chinese customs data.

Meanwhile, in 2019, China imported about 3.5 billion USD per month on average, equivalent to about 7.5 tons of gold.