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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Abner Hosmer who wrote (8120)	3/9/1998 7:53:00 PM
From: goldsnow	Respond to of 116764

China gold price cut seen boosting industry 12:10 a.m. Mar 09, 1998 Eastern BEIJING, March 9 (Reuters) - China's recent move to cut gold prices is expected to boost jewellery sales and help revive the ailing industry, the China Daily said on Monday. Retail prices of gold jewellery had fallen to 118 yuan ($14.2) per gram from 129 yuan per gram at the start of March, the newspaper said. Sales of some jewellery retailers had nearly doubled after the cuts, it said. Last month the central bank cut its gold purchase price to 80.5 yuan per gram from 88 yuan per gram and its sales price to 82.8 yuan from 94.32 yuan due to sharp falls on the world market. ''The move has paved the way for the full deregulation of the domestic gold business, showing the government's firm determination to open up its gold market,'' the newspaper quoted Wang Lixin, a Beijing-based official with the World Gold Council, as saying. Analysts have said a free Chinese gold market is still years away. China requires all gold produced domestically to be sold to the People's Bank of China, which then sells it to jewellery retailers. Official prices are used as a guideline for jewellery sales. Many jewellery retailers were taking a hit because they were being forced to sell at the new lower price gold stocks which were bought at a higher price, the newspaper said. ''Many jewellery stores have suffered significant losses,'' it said without giving details. The industry was also bedevilled by old-fashioned designs and obsolete processing methods, it said. China's gold demand rose three percent last year to hit 213.8 tonnes despite an official price level higher than the world level, it said. China produced 166.3 tonnes of gold last year and has targeted output of 150 tonnes this year. Buying was fuelled by large amounts of cheap jewellery smuggled from Hong Kong, it said without elaborating. Gold bullion has fallen sharply on world markets in recent months. It was quoted at $293.80/294.30 an ounce in Hong Kong on Monday. ($-8.3 yuan) -- Beijing Newsroom (86) 10-6532-1921; Fax (86) 10-6532-4978