Shanghai eyes gold exchange-traded funds

China is to open its domestic market for precious metals to the international community as Shanghai looks to gold exchange-traded funds in a maturing market, said officials attending a conference on gold in Hong Kong.

Shanghai Gold Exchange will launch over-the-counter trading, gold ETFs, Friday night trading and improve the leasing market, according to Wang Zhe, head of Shanghai Gold Exchange.

An interbank market will also be launched that will start with spot contracts and gradually offer forward contracts, according to Wang.

In the future, all banks trading on the China Foreign Exchange Trading System and National International Funding Center, including foreign banks, will be able to trade in the market, according to Wang.

Pilot exercises in the interbank market will be conducted with Chinese banks and will gradually open to all, according to Wang.

Analysts said the interbank market will enable more cooperation between the Shanghai Gold Exchange and commercial banks as well as other financial institutions and make investments in gold more convenient in China.

China will open up to the global gold market, increasing its impact and attracting more foreign banks to get involved in China's domestic market, said Xie Duo, head of the financial market department of the People's Bank of China.

wuyiyao@chinadaily.com.cn