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China lowers gold trading threshold for private investors

(Xinhua)
Updated: 2006-12-26 09:57

In a move to attract small private investors, China on Monday lowered the trading threshold at the Shanghai Gold Exchange (SGE) from one kilogram to 100 grams.

SGE sources said 100-gram gold bars, which debuted on Monday at an initial price of 160 yuan (20.5 U.S. dollars) per gram, started spot trading at an opening price of 157 yuan per gram and then remained flat for the entire trading session, closing at 157 yuan per gram, a drop of three yuan.

Related readings:
 SGE lowers gold trading threshold China to open gold market wider
 New rules to make gold shinier industry

During Monday's trading, only 0.4 kg or four gold bars of this type changed hands, and transactions amounted to only 62,800 yuan.

However, business was brisk for other types of gold. 2,359 kg of two other conventional types of gold were traded and 1,506 kg of gold listed for trading delay (T+D).

An SGE spokesman blamed the poor market performance of the newly premiered 100-gram gold bars on a the Christmas holiday season.

Industry experts still believe China's latest move will help diversify gold investment channels in the country and standardize the market for gold transactions.

In July last year the SGE proposed spot trading of gold by private investors in cooperation with the Industrial and Commercial Bank of China (ICBC). However, the one-kg 160,000 yuan (20,000 US dollars) threshold turned off many private investors.

The volume of spot transactions by private investors in the first ten months accounted for just 0.57 percent of total trading.
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