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Strategies & Market Trends : YellowLegalPad -- Ignore unavailable to you. Want to Upgrade?

To: John McCarthy who wrote (765)	9/9/2009 9:24:05 AM
From: John McCarthy	Respond to of 1182

ICBC Eyes China's Gold Appetite SHANGHAI -- Industrial & Commercial Bank of China Ltd. Wednesday launched a unit specializing in precious-metals trading, seeking to capitalize on bullish commodity prices and a growing appetite for gold in China. "With China's rising affluent population, its gold market has been expanding at a rapid pace, and we believe it still has huge potential to grow," ICBC said in a statement. ICBC, China's largest lender by assets, said the Shanghai-based unit will engage in financing, investing and leasing in the global precious-metal markets, mainly related to gold. The statement comes after gold futures topped $1,000 an ounce both in London and New York trading Tuesday as the U.S. dollar tumbled. Gold-futures prices have also rallied in China in the past week and some foreign analysts have speculated that that the Chinese government is deliberately encouraging a gold fever, pointing to a recent China Central Television news program that appeared to advocate ordinary citizens buying precious metals as investments. "There hasn't been any direct government action to support gold prices," said Hu Yanyan, gold analyst for Everbright Futures, dismissing suggestions that the CCTV program was an expression of government policy. "The large majority of trading is going on among funds and bigger investors." Analysts expect the rally in gold prices to weaken somewhat after it rides a period of dollar weakness and equity strength. In 2008, China overtook South Africa as the world's largest supplier of gold. In the January-May period, China's gold production rose 14% from a year earlier to 120.24 metric tons, according to the latest government data. Earlier this year, China's regulators approved four local banks, including ICBC, to trade gold futures, in a bid to invigorate the lackluster Shanghai Futures Exchange. The move also gave the banks a platform to develop hedging products for wealth-management clients, analysts said. The three other banks approved to trade gold futures were Bank of Communications Co., Industrial Bank Co. and China Minsheng Banking Corp. —-Yue Li and Chuin-Wei Yap online.wsj.com