4:21 PM
CHINA gave foreign investors direct access to its gold market for the first time yesterday as the biggest gold-consuming nation seeks to exert more influence over prices while boosting the yuan's global use.
The Shanghai Gold Exchange started trading contracts in the city's free-trade zone. The contracts will be linked to its domestic spot market and are available to about 40 international members, including Goldman Sachs Group and UBS. Access was previously limited to some Chinese subsidiaries.
Gold in China this year cost between $31 (R339) an ounce more and $42 less than the London spot price, according to data compiled by Bloomberg.
China, which overtook India as the biggest bullion buyer last year, wants to establish a benchmark price in Asia by opening up trading to a larger pool of investors.
It is also pushing to reduce controls over the movement of capital across its borders after policymakers pledged last year to carry out the widest expansion of economic freedoms since the 1990s.
"It's indicative of the ambition to move the gold market more to where the consumption is," Victor Thianpiriya, a commodity strategist at Australia & New Zealand Banking Group, said by phone from Singapore. "It makes sense that price discovery occurs in the centre of consumption."
Premier Li Keqiang was scheduled yesterday to tour the free-trade zone, days before its one-year anniversary. The governor of the central bank, Zhou Xiaochuan, was due to attend the opening ceremony.
The Shanghai Gold Exchange started trading contracts in the city's free-trade zone. The contracts will be linked to its domestic spot market and are available to about 40 international members, including Goldman Sachs Group and UBS. Access was previously limited to some Chinese subsidiaries.
Gold in China this year cost between $31 (R339) an ounce more and $42 less than the London spot price, according to data compiled by Bloomberg.
China, which overtook India as the biggest bullion buyer last year, wants to establish a benchmark price in Asia by opening up trading to a larger pool of investors.
It is also pushing to reduce controls over the movement of capital across its borders after policymakers pledged last year to carry out the widest expansion of economic freedoms since the 1990s.
"It's indicative of the ambition to move the gold market more to where the consumption is," Victor Thianpiriya, a commodity strategist at Australia & New Zealand Banking Group, said by phone from Singapore. "It makes sense that price discovery occurs in the centre of consumption."
Premier Li Keqiang was scheduled yesterday to tour the free-trade zone, days before its one-year anniversary. The governor of the central bank, Zhou Xiaochuan, was due to attend the opening ceremony.
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