Despite gold prices hitting record highs, China's gold import volume last month reached its highest level in nearly a year.
According to Bloomberg, customs data released on the 20th showed that China's total gold import volume in April reached 127.5 tons, an 11-month high, with an increase of 73% compared to the previous month.
The report said that the growth in imports was likely due to the People's Bank of China issuing new import quotas to some commercial banks in April, aiming to respond to the strong demand for gold from institutional and retail investors at the peak of the trade war. The central bank controls the flow of physical gold and usually issues import licenses and quotas only to certain designated banks.
Chinese investors have turned to gold as a hedge against the escalating geopolitical uncertainties, which boosted the strong rise in gold prices earlier in the year. Although gold prices have retreated in May with hopes of reconciliation in trade tensions, the central bank's continued purchase of gold for diversifying its dollar asset allocation is expected to further support gold prices.