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I’d expect this to help us

Posted by ipso facto @ 16:56 on March 4, 2015  

CNH Tracker-Shanghai-Hong Kong gold link-up may offer new regional benchmark

Feb 26 (Reuters) – China is set to launch a link between gold markets in Shanghai and Hong Kong this year following a landmark stock connect scheme, aiming to enhance its pricing power of gold contracts and ultimately challenge its competitors in the West.

While China is the world’s largest consumer of the precious metal, having surpassed India, daily trading of gold in financial centre Shanghai is small compared with London.

The move to develop gold trading comes as more trade flows to Asia and is in line with Beijing’s efforts to open up its domestic markets to foreign investors. China wants more market players to use its yuan currency when settling trade contracts and for making investments.

“We will cooperate with the Shanghai Gold Exchange and set up a link this year, making it a platform for market participants in Hong Kong to enter mainland China’s gold market,” Chan Sheung Chi, president of Hong Kong’s Chinese Gold & Silver Exchange Society said this week.

Chan offered no details on how the gold connector would work, but said the launch time could be as early as in June.

The Shanghai Gold Exchange is the world’s biggest physical gold exchange, and all buying and selling of spot bullion in China has to happen through the exchange.

Precious metals and commodities are areas where Beijing has been eager to promote yuan usage, but so far progress has been slow compared to its use for settlement in cross-border trade.

The Chinese Gold & Silver Exchange Society, which was founded in 1910 and has 171 member firms, introduced gold bar contracts denominated in yuan in 2011. China’s Bohai Commodity Exchange also launched cross-border spot trading of iron ore and natural rubber in yuan in Hong Kong in 2013.

Potential for the yuan’s internationalisation via gold trading is huge as China is among the largest consumer of many commodities, including coal and copper. Shanghai’s pilot free trade zone also launched an international board for gold trading last year

more http://www.reuters.com/article/2015/02/26/markets-offshore-yuan-idUSL4N0VY0OX20150226

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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.