goldman sachs and gold cartel, in one corner, and India and China in the other, ready, set, go on 3, 2 ...
if i know chinese speculators, the run ought to be very good, far more so than that tepid rise back in 1980
i am guessing that the gold mkt and hk real estate mkt will be well supported, especially when the shanghai stock exchange craters
without ability to take physical delivery, individuals can go way long without being bothered by physical constraints :0)
what they can not see cannpt hold them back ;0)
bloomberg.com
Shanghai Futures Exchange to Introduce Gold Contract on Jan. 9
By Glenys Sim and Feiwen Rong
Dec. 31 (Bloomberg) -- The Shanghai Futures Exchange, China's biggest commodity bourse by value, will introduce gold futures on Jan. 9, underscoring the increased sophistication of the nation's financial markets and rising investor interest in the metal.
Each contract will represent 1 kilogram of gold, with the minimum margin requirement set at 7 percent, the exchange said in a statement on its Web site on Dec. 29. Trials for the new product will commence on Jan. 2.
Commodity markets in China are expanding their offerings to boost turnover and provide tools for hedging against price fluctuations on physical markets. The Asian nation is set to become the world's second-largest gold producer this year, beating the U.S., as mines boost output amid increased demand.
``There is a lot of interest in gold futures for speculation, investment or hedging,'' Zhu Bin, head of research at Nanhua Futures Co., said by phone today from Hangzhou in eastern China.
Gold for immediate delivery has gained 32 percent this year, driven by investors seeking to hedge against rising inflation, and as an alternative holding to the U.S. dollar. The price was at $842.40 an ounce at 10:35 a.m. in Singapore, close to its highest level in almost 28 years.
The Shanghai Gold Exchange, China's biggest precious-metals market, already offers cash and cash-deferred contracts for gold, as well as platinum and silver. Chinese exchanges including the Shanghai Futures Exchange are closed to overseas investors even as they influence world prices of copper and other raw materials.
Hedging Prices
The role of the new gold contract is to ``provide an avenue for investors to hedge against price fluctuations,'' according to the statement from the Shanghai Futures Exchange. ``Physical exchange of gold is not the main objective of futures trading.''
Individual investors will be barred from taking actual delivery of the metal in a bid to discourage those who are not able to handle the risk, the statement said. Institutions will be allowed to take delivery of the precious metal, it said.
``The exchange barred individual investors from entering into delivery out of concern that domestic production might not be enough,'' Zhu said. ``Such a clause might reduce the appeal of the contract but as long as there's sufficient liquidity in the market, pricing should not be much of a problem.''
China will probably produce 260 metric tons of gold this year compared with 240 tons in 2006, putting it on course to surpass the U.S. as the world's second-biggest producer, the China Gold Association said Nov 6.
India, U.S.
Demand in the Asian nation for gold jewelry jumped 24 percent to 221 metric tons in the first nine months, according to GFMS analyst Veronica Han Dec. 3, citing data from the World Gold Council. That compares with 515 tons in India, the biggest consumer, and 165 tons in the U.S.
Gold is the fifth futures contract approved by China's financial regulators this year after zinc, rapeseed oil, polyethylene and palm oil. The Shanghai Futures Exchange offers contracts in copper, aluminum, zinc, natural rubber and fuel oil.
Turnover, or the value of the contracts traded, on the Shanghai Futures Exchange, surged 76 percent to 20 trillion yuan ($2.7 trillion) in the first 11 months of the year. Total turnover in 2006 was 12 trillion yuan, according to data on the exchange's Web site. Trading volumes rose 44 percent to 152 million contracts in the first 11 months of this year, compared with 116 million in all of 2006.
To contact the reporters for this story: Glenys Sim in Singapore at gsim4@bloomberg.net ; Feiwen Rong in Singapore at frong2@bloomberg.net |
