BEIJING - An executive of
the Shanghai Gold Exchange has said that China's sole
national gold bourse has made submissions to the central
bank in order 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, China Daily reported
Tuesday.
"The move will build more channels for
us to integrate with the international gold market,"
Wang told 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, or yuan.
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 closed 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, suggested on Monday that 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 $455 per ounce during the second half of this
year.
World gold prices recently reached a
18-year record high of $455 per ounce mainly due to the
weakening US dollar. "GFMS" base case prophesies a slump
in the dollar and surge in (gold) investment (are)
likely to continue," Walker said.
Gold trade
volume in the Shanghai Gold Exchange rose by 39.53%
year-on-year to 257.72 tonnes in the first 10 months of
this year.
(Asia Pulse/XIC)
Dec 1, 2004
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