Hong Kong’s gold exports to China fall 4.8%

Gold headed for first annual decline in 13 years.

Hong Kong’s net gold exports to China fell 4.8% in June after a slump in prices crimped demand following mainland curbs on the use of bullion in financing deals.

Mainland buyers purchased 101 metric tons of gold after deducting flows from China into Hong Kong compared to 106 tons in May. Inbound shipments including scrap were 113 tons from 127 tons in May based on calculations by Bloomberg derived from data from the Hong Kong’s Census and Statistics Department (CSD).

China’s gold purchases in June were nearly twice the 68 tons in the same month last year, according to CSD.

Exports of gold to Hong Kong from China were 12 tons in June, down from 21 tons in May and compared with 27 tons in June 2012.

Gold is heading for its first annual decline in 13 years as investors lose faith in the precious metal amid speculation the U.S. Federal Reserve will end its billion dollar stimulus program by 2014.

Analysts said investors held back from bullion investments in June after they rushed to buy in mid-April, only to discover that prices had dropped further.