China is ramping up Swiss gold imports, signaling better domestic demand

China’s gold imports from the major refining hub of Switzerland jumped to the highest in more than five years, signaling demand improved as the Asian nation relaxed strict COVID-19 measures.

One of the world’s top bullion buyers, China shipped in more than 80 tons from Switzerland in July, according to Swiss Federal Customs Administration. That’s more than double the previous month and eight times more than in May.

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The data indicates that Chinese gold demand is picking up, after being hurt by lockdowns to control COVID outbreaks in several major cities. While the country’s purchases rarely have the power to drive prices higher, they can provide a floor when Western investors sell.

“China has gone from a situation where everything was closed to things are back to semi-normality,” said Nikos Kavalis, a managing director at consultancy Metals Focus Ltd. “The market’s still not great, but it’s definitely a lot better than it was in April.”

Gold prices remain down for the year, after nearing a record high in March as Russia’s invasion of Ukraine stoked demand for a haven.

Prices have been supported between about $1,700 and $1,800 an ounce, even as the Federal Reserve embarks on aggressive interest-rate hikes that normally reduce the metal’s appeal.

Gold in China has also fetched a premium of about $7 to international prices, a relative high level that will have spurred local banks to import bullion, according to Kavalis. Only lenders with state-issued licenses are permitted to bring gold into China.

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