BIZCHINA / News
Exchange starts gold trading via local banks
(Shanghai Daily)
Updated: 2007-06-26 09:03
The Shanghai Gold Exchange will launch individual gold bullion trading
nationwide in July by teaming up with Industrial Bank.
The exchange will hold a joint briefing with Industrial Bank about the
service in the first part of July, said the gold bourse yesterday.
It will later launch trading through Huaxia Bank. Industrial and
Commercial Bank of China is likely be the third player to join the scheme.
Under the plan, individual investors will be able to trade gold from a
minimum threshold of 100 grams, which would require about 16,000 yuan
(US$2,099) based on yesterday's prices on the bourse.
The main selling point is that investors can take the bullion home at
cheaper prices than sold by jewelers and coin makers. For instance,
investment-grade bullion commands more than a 10 percent premium in the
market.
Lenders including Bank of China and China Construction Bank already offer
virtual gold trading, although investors can't hold the actual bullion,
instead betting on prices through a special bank account.
The Shanghai branch of ICBC started a trial program of individual gold
trading in July 2005, where investors can take bullion home. The branch
cut the trading threshold from 1,000 grams to 100 grams last December to
boost its market appeal.
Related readings:
Shanghai to set up gold fund company
Gold Exchange is to enroll foreign banks
Gold exchange considers derivatives trading
Find more in
Markets Watch
By last Friday, 3,301 investors had opened gold-trading accounts at the
branch. Turnover was 6,081.3 kilograms in 2006, and so far this year is
1,476.3 kilograms, the bank said.
The People's Bank of China, the central bank, gave approval for the
bourse to start nationwide gold trading services at the end of 2006, the
gold bourse said yesterday.
"The pace of opening the market now depends on the system compliance of
lenders," said a bourse official. "Our system was ready two years ago."
The bourse said earlier this month that it will join hands with more
commercial banks to trade gold for retail investors.
Chinese people have traditionally kept gold bullion on hand as a safe
haven to hedge against inflation and as a symbol of fortune. The country
is the world's third-biggest consumer of gold.
China deregulated its gold market in late 2002, when the Shanghai Gold
Exchange officially started operation to allow gold producers, corporate
users and banks to trade the yellow metal.
The exchange now trades gold, platinum and silver. Turnover on gold
topped 1,249 tons last year on the bourse, up 37.81 percent from a year
previously.
(For more biz stories, please visit Industry Updates)
Learn Chinese, Chinese Online Class
