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Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (3220)	2/10/2003 12:04:49 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 5423

Chinese retail gold buying on the rise, report from Beijing Peking, PugNose, whatever they call it by way of Jay Chen Thursday, Feb 6, 2003 3:56 PM that handsome dog prowling around Hong Kong As the market opens up, big banks and the public join the gold rush china.scmp.com Friday, February 7, 2003 MARK O'NEILL in Beijing As she stood by a shop counter and stared at a gold coin bearing a goat design, Wang Xiulin caressed her gold necklace. "I feel so good wearing this. I would like to buy one of the coins too. The price of gold will only rise this year," she said. Ms Wang, a 45-year-old teacher, was an early customer yesterday at a gold and jewellery shop in Wangfujing, Beijing's main commercial street, which has reported strong sales since the start of the year. Gold fever has spread not only among the public but also to the big four state banks, which have applied to the People's Bank of China for the right to import and export gold, as they see a large, untapped retail market. Prices on the Shanghai Gold Exchange (SGE), which opened at the end of last October, reached record levels last month, even exceeding the world price. The price in the Wangfujing shop yesterday was 108 yuan (HK$101) per gram. The SGE's deputy general manager, Yi Po, said the surge in the domestic price was a result of the impending war against Iraq, higher world prices, and expectations of a fall in the US dollar. "The Spring Festival is traditionally a peak time for the sale of gold jewellery," he said. Ms Wang said other investment options were unattractive. "The stock market is down, interest rates are very low and the return on treasury bonds small. People expect a war in Iraq. In such a climate, gold is appealing." Such thinking has fuelled brisk sales in selected stores in cities that have received official approval to sell gold ingots since the end of last year. One industry analyst put domestic demand this year at more than 300 tonnes, of which 100 will be imported. "The big banks are looking at the example of India, where annual demand before liberalisation was about 200 tonnes. Once the market was liberalised, annual demand tripled and is now nearly 900," he said. "They see a similar potential market in China. They argue that their participation would increase the volume of trading on the SGE and bring it closer to the international market." A People's Bank of China official said it had not granted import rights to any of the four banks and that approval would require the agreement of other departments of the government. The mainland does not allow the free import and export of gold, but is moving toward liberalisation by allowing the SGE and limited retail sales of gold ingots to the public