CHINA has begun allowing gold imports through Beijing, sources familiar with the matter said, in a move that would help keep purchases by the world’s top bullion buyer discreet at a time when it might be boosting official reserves.

    The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong’s pole position in China’s gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

    China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied US$53 billion worth of gold to the mainland.

    “We have already started shipping material in directly to Beijing,” said an industry source, who did not want to be named. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.

    The People’s Bank of China is believed to be adding to its gold reserves, according to the World Gold Council (WGC), as it looks to diversify from U.S. Treasuries. The central bank rarely reveals the numbers.

    Gold’s 28 percent plunge last year and China’s record bullion imports in 2013 sparked speculation that the People’s Bank of China has added significant amounts of gold to its reserves, and could likely make an announcement this year.

    Central banks tend to be very secretive about their gold purchases and sales because prices are extremely sensitive to their trades. Rumors last year of Cyprus selling its gold reserves to prop up finances sent the metal down more than 10 percent over two days, its biggest decline in 30 years.

    Gold has traditionally been imported from Hong Kong into Shenzhen, where nearly 70 percent of the mainland’s gold jewelry business is located. Shanghai was opened up as a second port last year. (SD-Agencies)