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BOC to sell gold for dollars
(Shanghai Daily)
Updated: 2006-03-01 10:25
The Bank of China, the country's biggest foreign currency lender, plans to allow investors to buy and sell gold using their US dollar accounts in a move to boost sales of the precious metal.
The BOC's Shanghai branch says it will start trial trading in greenback gold this year and expand the pilot to its other branches in China.
China now allows investors to buy and sell gold only through yuan accounts, though the sales are based on the dollar value of the metal on international markets.
Expanding the trades to US dollar accounts will help increase the capital pool and ward off foreign exchange risks, authorities said.
The lender will also cut the spread on gold - the difference between buying and selling prices - by up to 20 percent from next Monday to May 27 to further boost trading in Shanghai. The lowest spread will be 0.62 yuan (8 US cents) per gram during the period.
Gold has long been a popular investment product in China, as it is considered to be a safe haven and a symbol of good fortune.
The BOC began trading in gold-linked certificates in November 2003, becoming the first of the country's Big Four banks to begin offering such sales to individuals.
Under "paper gold" trading, investors can buy and sell certificates that track the market price of gold.
China Construction Bank later followed with a similar product of its own.
The Shanghai branch of the Industrial and Commercial Bank of China pioneered a new option in late July under which individual investors could take physical possession of the precious metal.
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