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| Golden ornaments are on display at a market in
Nanjing, East China's Jiangsu Province. Shanghai Gold Exchange is
currently seeking ways to attract foreign gold
traders.(newsphoto) |
An executive of Shanghai Gold Exchange yesterday
said that China's sole national gold bourse
has made submissions to the central bank to attract
foreign gold traders.
"We are striving to invite qualified international banks and gold firms
to directly conduct transactions in our exchange," said Wang Zhe, general
manager of the gold exchange.
"The move will build more channels for us to integrate with the
international gold market," Wang said yesterday at an international forum
on global gold outlook, infrastructure support and market development in
Beijing.
At present, there are 128 domestic membership traders in the gold
exchange, including commercial banks and gold producers and processors,
which conduct spot transactions using renminbi.
The exchange was launched in late 2002, marking a substantial step
towards liberalization of China's gold market. Previously, domestic gold
producers had to sell all of their gold to the central bank.
"However, the gold exchange is close to the international gold market
without engagement of foreign traders. Domestic gold prices don't move
fully in line with international prices," Wang said.
Integration with the international market will pave the way for the
gold exchange to open individual gold investment businesses, he said.
The Shanghai branch of the China Industrial and Commercial Bank started
pilot individual gold investment business at the gold exchange in October.
Albert Cheng, managing director of the World Gold Council's Far East
operations, yesterday suggested Chinese regulators should permit
commercial banks to carry out gold investment business quickly to meet
market demand.
"The construction of an over-the-counter gold trade platform at
commercial banks is an important alternative to extend the gold trade
platform," Cheng told the forum.
"For the general public, such a trade platform is reliable and
convenient, and it can provide extended financial services. For gold
producers, this platform can put product sale and business credit together
into their own development strategy. These are advantages that are not
seen on any other platforms," he said.
The gold council predicts that gold demand in China will grow to 600
tonnes annually in coming years with the opening of gold investment
businesses from around 200 tonnes now.
"However, gold investment does not mean speculating in money. We must
make sure that we develop the gold investment market in China for the
purpose of providing the Chinese people with a safer means of keeping the
value of assets. For a healthy development of China's gold investment
market, we should weaken the awareness of speculation," Cheng said.
Paul Walker, chief executive officer of GFMS Ltd, the London-based
precious metals consultancy, yesterday said that world gold prices will
range between US$390 and US$455 per ounce during the second half of this
year.
World gold prices recently reached a 18-year record high of US$455 per
ounce mainly due to the weakening US dollar. "GFMS' base case prophesies a
slump in the dollar and surge in (gold) investment likely to continue,"
Walker said.
Gold trade volume in the Shanghai Gold Exchange rose by 39.53 per cent
year-on-year to 257.72 tonnes in the first 10 months of this year.
(China Daily) | 
Updated: 2004-11-30 10:38