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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (58501)	8/27/2000 3:36:55 PM
From: Les H	Read Replies (1) \| Respond to of 99985

China To Set Up Gold Exchange By Early 2001- Report BEIJING (Dow Jones)--China's central bank is expected to loosen its monopoly on buying and selling gold and set up a local spot market by early next year, state media reported Sunday. The official China Daily Business Weekly said a local gold exchange - as a first step toward gold market deregulation - is widely anticipated to be set up "at the end of this year or the beginning of next year in a city yet to be named." The gold exchange will replace the monopoly by the People's Bank of China over nationwide gold production, purchasing and allocation, the report said. Last December, China began to ease the bank's monopoly control on silver sales, setting up a trial exchange in Shanghai, which is restricted to local buyers and sellers. However, the spot silver market was widely regarded as a pilot exercise for setting up a similar spot gold market. Such a market is eventually expected to support an increase in gold imports as local investors turn to bullion as an alternative to low-interest deposits and securities as investment products. "Gold sales are expected to be opened completely and individuals will be allowed to hold, buy and sell gold products, such as bullion, for saving and investment," the report said, citing State Council National Economic Research Institute Director Fan Gang. The institute is a think tank which advises the State Council, which serves as a cabinet under China's political structure. World Gold Council statistics quoted in the Business Weekly report estimate domestic demand for gold in China rose 1% on year to 102.5 metric tons in first half 2000. Gold for jewelry is the main source of local demand. The People' Bank of China now holds about 400 tons of gold, less than 3% of the country's $158.6 billion in foreign reserves at the end of June 2000, the report added. The central bank currently buys gold at a fixed price of 76.3 yuan ($1=CNY8.28) per gram, having adjusted its price nine times in the past 20 months - in line with fluctuations in the world price.