Gold buyback program gets cold shoulder
english.eastday.com
The gold buyback program started yesterday received a lukewarm reaction nationwide, with a mere three transactions totaling 200 grams in Beijing on the first day of trading, the Shanghai Morning Post reported.
Aimed at restoring individual gold investment in China since 1949, the buyback program was postponed to today in Shanghai due to computer problems here, while transactions in the other cities debuted yesterday as scheduled.
The gold involved in the buyback program is investment-grade gold bullion issued at the end of last year by China Gold Coin Co., the country's sole wholesaler of gold bars and coins.
About 1,200 kilograms of such bullion in either 50 or 100-gram formats have been sold in four cities, Shanghai, Beijing, Nanjing and Guangzhou.
The three deals reported yesterday in Beijing were two gold pieces of 50 grams and one of 100 grams.
Industry analysts blamed low gold prices for the cold market reaction yesterday.
At present the local buyback price hasn't been fixed. It should be around the current price at the Shanghai Gold Exchange, which was 94.94 yuan (US$11) a gram on Friday.
That price could be profitless for most bullion holders in Shanghai, whose costs are estimated from 97 to 104 yuan a gram, the analysts said.
But it could mean profit for Beijing bullion holders, whose costs are estimated from 92 to 103 yuan.
The retail price of gold is lower in Beijing than in Shanghai, explaining why sales of gold bullion received a cooler reaction in Shanghai than in Beijing when it hit the market last December.
Only 50 kilograms of the bullion was sold in the city in the first two months of the year, compared with 100 kilograms sold in the capital during the first three days of the offering.
Jane Chen / Shanghai Daily news |
