China goes for gold

China goes for gold

The central bank wants to attract more players to the bullion market and encourage firms to use renminbi-denominated gold derivatives at the Shanghai Futures Exchange.

Market participants may even be permitted to trade gold contracts on foreign boards of trade, the PBoC said.

“The development of the gold industry helps improve the competitiveness of China’s gold industry, and also promotes the development of other mineral resources,” the bank said.

More commercial banks will be allowed to import and export gold, though the PBoC gave no timetable for this. At present, only the four big state-owned banks can trade gold.

Trading firms will be “encouraged” to hedge their positions on the Shanghai Gold Exchange, which offers gold spot and forward contracts, or the Shanghai Futures Exchange, which lists gold futures.