China to start gold swaps trading to further liberalise market

Trading will start 25 November on the Shanghai-based China Foreign Exchange Trade System


The Shanghai Gold Exchange, the country’s biggest spot gold bourse, will handle related settlement and delivery, said the statement. Photo: AFP
The Shanghai Gold Exchange, the country’s biggest spot gold bourse, will handle related settlement and delivery, said the statement. Photo: AFP

Beijing: China, on track to overtake India as the world’s largest gold consumer this year, will start interbank swaps trading next week in a move to further open up the domestic precious metals market.

Trading will start 25 November on the Shanghai-based China Foreign Exchange Trade System, according to a statement by the National Interbank Funding Center on Friday. The Shanghai Gold Exchange, the country’s biggest spot gold bourse, will handle related settlement and delivery, said the statement.

Swaps will be one more tool for banks to manage risks associated with bullion trading and will help broaden China’s gold market, said Song Qing, fund manager at Lion Fund Management Co., China’s first asset manager to place money in foreign exchange-traded gold funds.

Bullion consumption in the world’s second-largest economy will surge 29% this year to a record 1,000 metric tons, according to the median of 13 estimates from analysts, traders and gold producers in China surveyed by Bloomberg News.

Bullion of 99.99% purity on the Shanghai Gold Exchange dropped 0.3% to trade at ¥245.66 ($1,254.03 an ounce) at 2:30 pm local time. Gold for immediate delivery was at $1,245.82 an ounce. BLOOMBERG

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