THE Chinese mainland’s net gold imports via main conduit Hong Kong rose in February, from a 17-month low hit in the previous month, buoyed by restocking after the Lunar New Year and strong investment demand.

    Despite the increase, arrivals remain much lower than the 2015 monthly average, raising doubts over the strength of demand from the top consumer amidst a global price rally.

    The mainland’s net gold imports rose to 53.869 tons last month from 33.041 tons in January, according to data emailed to Reuters by the Hong Kong Census and Statistics Department on Tuesday. The mainland’s monthly imports from Hong Kong averaged around 70 tons last year.

    “There was some restocking after the Chinese New Year last month,” said a trader in Beijing. Gold is a popular gift during the holiday, which was celebrated in early February this year.

    “Another reason (for higher February imports) is that with gold prices holding above US$1,200, more people want to buy physical gold for investment,” the trader added.

    Spot gold rose nearly 11 percent in February, its biggest monthly gain in four years, as a wider market turmoil burnished the metal’s safe-haven appeal.

    While higher global prices have driven up investment demand, jewelry demand — which accounts for a bulk of Chinese gold purchases — has taken a hit, even during the seasonally strong Lunar New Year period.

    The mainland typically imports heavily towards the end of the year to stock up for the Lunar New Year, which is celebrated at the start of a year. Imports tend to taper off after that, but the extent of the decline in January this year surprised many.

    The mainland does not provide trade data on gold, and the Hong Kong figures serve as a proxy for flows to the mainland.

    The Hong Kong data might not provide a full picture of mainland purchases as imports through Shanghai and Beijing, for which no data is available, have been rising.

    (SD-Agencies)