Loading ...By Bloomberg News Dec 3, 2014 11:53 PM PT 2 Comments Email Print
China’s central bank circulated a draft plan to ease restrictions on gold imports, said people with knowledge of the matter, in a move that may lead to lower prices in the world’s biggest market for bullion.
The People’s Bank of China drafted a plan that will open up gold imports to qualified miners as well as all the banks that are members of the Shanghai Gold Exchange, according to the people, who asked not to be identified because the proposal hasn’t been made public. China Gold Coin Inc., a maker of commemorative gold and silver coins, could also qualify to import bullion, they said.
Chinese regulators are pushing to open up the country’s gold trade and lure foreign investors as part of its broader effort 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, a move that may extend its influence over prices while boosting the role of its currency in global trade.
The move may further cut the premium Chinese buyers pay for gold. That spread has averaged $2.74 an ounce so far this year, down from an average premium of $18.75 last year, according to Bloomberg News calculations of the difference between benchmark prices in London and contracts traded on the Shanghai Gold Exchange.
“More importers will level the playing field,” Liu Xu, an independent gold analyst, said by phone. While the move may not lead to more imports, eased restrictions could “erode the premium and benefit Chinese consumers who buy gold,” Liu said.