(Adds background, context, and analyst comment)
July 25 (Reuters) - China's net gold imports via Hong Kong slumped 18% in June from the previous month, Hong Kong Census and Statistics Department data showed on Thursday, as the recent surge in gold prices weighed on jewelry demand.
Net imports into the world's top gold consumer stood at 21.919 metric tons in June, compared with 26.722 metric tons in May, data showed.
Total gold imports via Hong Kong were down 15.4% at 29.524 tons.
WHY IT'S IMPORTANT?
China is the biggest bullion consumer and its buying trends can have bearing on global prices. The People's Bank of China refrained from gold purchases to its reserves for a second consecutive month in June, official data showed earlier this month.
The Chinese central bank, which controls the amount of gold entering the country via quotas to commercial banks, was the largest official sector buyer of gold in 2023.
KEY QUOTE
Jewelry demand is slowing as customer gloom deepens, evidenced by China’s largest jewelry manufacturer- Chow Tai Fook's 20% drop in Q1 sales and LVMH's slump in luxury goods sales in China, said StoneX analyst Rhona O'Connell in an email.
"There is a possibility that this trend will reverse as there are some signs of renewed investor interest in gold, although this may be concentrated in bars rather than jewelry ."
CONTEXT
The Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing.
China still has plenty of appetite for official gold purchases despite pausing in May and June, as low holdings relative to reserves drive continued acquisition, according to a policy insider, industry experts and data.
According to Goldman Sachs, Chinese gold demand is now cyclically soft due to price sensitivity and recent price surges, but emerging-market central banks, including China's, are likely to continue to buy gold frequently, whether disclosed or not.
Spot gold hit a record high of $2,483.60 an ounce last week, but has shed more than $100 since then.
(Reporting by Daksh Grover and Sherin Elizabeth Varghese in Bengaluru; editing by Jason Neely and David Evans)
((Daksh.Grover@thomsonreuters.com;))
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