Buy Gold Bullion | Shanghai <b>Gold</b> Exchange Launching International <b>Bullion</b> Exchange <b>...</b> | News2Gold |
| Shanghai <b>Gold</b> Exchange Launching International <b>Bullion</b> Exchange <b>...</b> Posted: 20 Aug 2014 02:09 AM PDT China Becoming Global Gold Hub And Gold Price Discovery Centre The people asked not to be identified because they aren't authorized to speak to the media. Gu Wenshuo, a spokesman for the exchange, confirmed that the trading system is being tested, without giving further details.
The gold contract will be priced and settled in yuan and the infrastructure is in place for trading to start in the third quarter, Xu said in June. The zone will have a vault capable of holding 1,500 metric tons of gold, which can either be imported into China or be in transit to other markets, Xu said. China is seeking to open up its bullion markets just as domestic demand weakens. Consumption contracted 19 percent in the first six months of the year, according to the China Gold Association. Bullion of 99.99 percent purity traded on the Shanghai Gold Exchange climbed 8.7 percent this year, damping demand which reached a record in 2013.
China and other Asian gold trading centres such as Singapore are calling for more localised pricing of the precious metal as they seek alternatives to the so-called London fix, the global benchmark for spot gold prices, which is being investigated by regulators on suspicion that it may have been manipulated. Standard Chartered (STAN.L), Shanghai Pudong Development Bank (600000.SS) and China Merchants Bank (600036.SS) were given regulatory approval recently to import gold, five sources with direct knowledge of the matter told Reuters. China approached foreign banks, gold producers and refiners to participate in SGE's international bourse, sources told Reuters earlier in the year, to boost its position as a price-discovery centre for gold. It plans to launch three physically-backed gold contracts. The chairman of the exchange said in June that China should have its own pricing benchmark as it is the biggest consumer and producer of gold.
However, an important fact, not realised by most market participants, is that the people of China were banned from owning gold bullion by Chairman Mao in 1950. This means that the per capita consumption of over 1.3 billion people is rising from a miniscule base. This suggests that demand will consolidate at these levels and could again return to record levels - particularly if there are losses in the Chinese property market or stock markets.
Even after the significant increase in demand seen in recent years - Chinese per capita gold ownership remains well below that of the levels seen in India and other Asian countries and indeed below levels seen in more affluent Hong Kong. Culturally, India is known to have the greatest affinity for gold in the world. China had a similar cultural affinity prior to the "cultural revolution" and in time its levels of gold ownership will likely rival those seen in India, Vietnam and other Asian countries. Within the lifetime of many Chinese people living today is the experience of hyperinflation as many middle aged and elderly Chinese people experienced hyperinflation in 1949. Many market participants and non gold and silver experts tend to focus on the daily fluctuations and "noise" of the market and not see the "big picture" or major change in the fundamental supply and demand situation in the gold and silver bullion markets. This is particularly due to investment, store of wealth and central bank demand from China and the rest of an increasingly affluent Asia. Gold Bust (2.8 Kilogramme) of Deng Xiaoping (Reuters/Bobby Yip) It is worth noting that the People's Bank of China's official gold reserves are very small when compared to those of the U.S. and indebted European nations. They are miniscule when compared with China's massive foreign exchange reserves of more than $3 trillion. The People's Bank of China is continuing to quietly accumulate gold bullion reserves. As was the case previously, they will not announce their gold bullion purchases to the market in order to ensure they accumulate sizeable reserves at more competitive prices. They also do not wish to create a flight from the dollar – thereby devaluing their sizeable dollar reserves. Expect an announcement from the PBOC, sometime later this year or in 2015, that they have trebled or even quadrupled their reserves to over 3,000 or 4,000 tonnes. Receive our award winning research here (10 votes)  |
| You are subscribed to email updates from Buy gold bullion - Google Blog Search To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 Comment for "Buy Gold Bullion | Shanghai Gold Exchange Launching International Bullion Exchange ... | News2Gold"