China to Allow More Gold Importers in Effort to Expand Market

Beijing (Mar 19)  China will allow more miners, smelters and other participants in the gold market to import bullion as it tries to expand trade in the world’s second-largest market.

Miners and smelters who meet certain production and investment conditions, as well as precious-metals coin makers and banks that are members of state-approved gold exchanges, will be able to import and export from China, according to rules jointly released Thursday by the country’s central bank and customs authority.

China is pushing to broaden the country’s gold trade as part of its efforts to link the mainland to global markets. The country began offering international institutions access to yuan-denominated gold contracts in Shanghai’s free-trade zone in September.

“The central government is gradually opening up the gold market by allowing more participants to trade,” Jiang Shu, a senior gold analyst at Industrial Bank Co. in Shanghai, said Thursday. “That is a policy direction.”

The country is trying to increase participation in mainland trade while also attempting to ensure its influence on commodity prices matches its significance as an importer and user of raw materials. The Shanghai Gold Exchange plans to start a yuan-denominated gold fix this year, people with knowledge of the matter said last month. The country is the second-largest consumer of gold and oil and the biggest user of industrial metals and iron ore.

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India took China’s spot as the biggest bullion buyer last year, according to the World Gold Council. India’s total demand in 2014 was 842.7 tons, 14 percent lower on the year, while China’s sank 38 percent to 813.6 tons. Gold demand in Asia is set to double by 2030 and boost prices to a record as investment and jewelry purchases climb, Australia & New Zealand Banking Group Ltd. said in a report Wednesday.

Gold for immediate delivery slid 0.2 percent to $1,165.04 an ounce at 6:52 p.m. in Shanghai, down 1.6 percent so far in 2015. Bullion of 99.99 percent purity on the Shanghai Gold Exchange has fallen 2.5 percent since the start of the year.

Source: Bloomberg