First Batch of SHFE Gold Contracts to See Delivery This Month
By Interfax-China
02 Jun 2008 at 10:51 PM GMT-04:00
resourceinvestor.com
SHANGHAI (Interfax-China) -- Delivery on the first batch of gold contracts trading on the Shanghai Futures Exchange (SHFE) will be completed this month, with the price expected to reach around RMB 200 ($28.82) per gram, an analyst told Interfax today.
"The delivery price of SHFE June 2008 gold contracts will be finalized on June 16, the last trading day, but it is expected that the final price will have little impact on domestic and international gold markets as it currently tracks spot gold prices," analyst Wang Zhouyi, from Shanghai CIFCO Futures, told Interfax. The delivery process will take place from June 17 to June 23.
"Many long position holders may see losses, as the price for SHFE June 2008 gold contracts might stay around RMB 200 ($28.82) per gram, whereas on the first day of trading on Jan. 9, the price started above RMB 230 ($33.14)," Wang said.
"Domestic gold prices may fall below RMB 197 ($28.39) per gram in mid-June as international gold prices experience a downturn in response to the recovering U.S. economy," said analyst Ye Linfeng from CGS Ltd., a domestic gold trading platform and gold market information provider.
"Though gold prices in both domestic and international markets rebounded today, the uptrend will be short-lived. Prices will drop again before the end of this week as crude oil prices continue to fall from the historical high and the U.S. dollar keeps rebounding," Ye predicted.
The SHFE started gold futures trading on Jan. 9, 2008, which saw trading of June 2008 gold contracts open at RMB 230.95 ($32.28) per gram.
SHFE June 2008 gold contracts reached a peak of RMB 233.59 ($33.66) per gram on March 17, when international gold prices stayed above $1,000 per ounce ($35.27 per gram).
December 2008 gold contracts are now the most traded contracts, ending at RMB 196.35 ($28.29) per gram today. Front gold contracts on COMEX recorded $883.4 per ounce ($31.16 per gram) at 3:00 p.m. Beijing time today.
The open interest rate of SHFE June 2008 gold contracts was 714 lots, with 1 lot equalling 1000 grams, when trading ended at 3:00 p.m. Beijing time today.
As of today, the margin for June 2008 gold contracts will be raised to 30%, and from June 12 to June 16, the margin will be lifted to 40%.
In late May, China's State Administration of Taxation (SAT) announced that investors who conduct physical delivery of SHFE gold contracts are not required to pay value-added tax (VAT).
© Interfax-China 2008. For further information regarding Interfax China Commodities Daily Reports, contact David Harman at david.harman@interfax-news.com. |
