China's First Gold Exchange Opens for Trade

Diane Monaco dmonaco at pop3.utoledo.edu
Tue Nov 12 10:11:43 PST 2002


At 06:08 AM 11/12/2002 +0530, Ulhas Joglekar posted:
>(People's Daily)
>
>Friday, November 01, 2002
>
>China's First Gold Exchange Opens for Trade
>
>The opening of China's first gold exchange Wednesday in Shanghai signals the
>end of 50-plus years of government monopoly over the gold market. With the
>opening of China's first gold exchange, Shanghai is poised to be a major
>international gold trading center, industrial analysts said.

Nice timing too for this market as gold prices begin to rise amidst geopolitical uncertainties and a weakening US dollar. A weaker dollar provides investors, in the rest of the world, an advantage when buying dollar-denominated gold. Also, there is some evidence that the recent US outflows of funds -- in response to the Fed's most recent rate cut -- flowed into monetary metal assets like gold.

The top gold markets are located in financial districts (New York, London, Zurich), it should be interesting to see what develops in a gold market located in a major gold production/consumption area. As the article says, China is the world's fifth largest gold producer and third largest consumer.

Diane



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