Last week a surprising report emerged from Reuters, namely that as part of its escalating capital controls, Chinese authorities have curbed private gold imports since May as the trade war escalated in a move that could be aimed at curbing outflows of dollars and bolstering its yuan. According to sources, China's gold imports were down 300-500 tonnes, with around $15-$25 billion, since May, as the PBOC had for several months curtailed or not granted import quotas to commercial banks responsible for most of the gold that enters the country Fast forward to today, when Reuters reports that China has partially lifted restrictions on imports of gold, according to bullion industry sources. According to the report, the central bank began to issue quotas again last week, but for lower amounts of gold than considered normal, "three people with direct knowledge of the matter in London and Asia said - without specifying exact amounts." "Some (quotas) have been given,” said one of the sources, adding that these were “less than usual.” It’s a "partial lift" of the restrictions, another source said. China has become a key swing driver in gold prices: it is now the world’s biggest importer of gold, with around 1,500 tonnes of metal worth some $60 billion - equivalent to one-third of the world’s total supply - entering the country last year. Chinese demand for gold jewelry, investment bars and coins has trebled in the last two decades as the country has rapidly become wealthier. China’s official gold reserves meanwhile rose fivefold to nearly 2,000 tonnes, according to official data. The recent sharp move higher in gold coincided with the sharp escalation in the currency war between the US and China, prompting many to speculate that Chinese residents had been aggressively buying up the yellow metal, in the process adding further downward pressure on the yuan. The last time Beijing took steps to curb capital outflows was when its currency weakened in the aftermath of the 2015 devaluation when the PBOC enforced restrictions on gold imports in 2016. The result was a surge in cryptocurrencies as Chinese savers took to the digital currency in lieu of gold purchases. While no clear data for capital outflows exist, a measure from China’s balance of payments called errors and omissions points to $88 billion leaving in the first three months of this year, the most on record. As we reported previously, Chinese customs figures showed the country imported 228 tonnes less gold in May and June - the last month for which data is available - than in the same two months of 2018. By mid-August, up to 500 tonnes less gold had entered China since May than over the same period last year, people in the bullion industry said.