The securities regulator yesterday approved gold futures trading on the Shanghai Futures Exchange (SHFE), the fourth new futures product to be launched in China this year.
The country has already launched futures contracts on zinc, rapeseed oil and LLDPE (linear low density polyethylene) this year.
The SHFE said yesterday gold futures contracts will be traded in the near future after the China Securities Regulatory Commission gave the green light, without giving a specific date.
China is a major consumer and producer of gold. It was the world's third-largest gold producer in 2006, with aggregate output of the metal reaching 240.08 tons, up 7.15 percent.
"Gold futures are expected to be traded more actively than other metal futures, because investors consider gold to be more a financial instrument than just a metal," said Li Jingyuan, an analyst at Haifu Futures Co.
Gold prices tend to go against the trend of other capital markets, so investors often look to gold for profit when the stock market is bearish or the US dollar is under pressure.
"Gold futures will help increase China's influence in the international market," said Ma Xiaofei, an analyst at China International Futures (Shanghai) Co.
(China Daily September 12, 2007)
