OFF INTO THE WILD WET YONDER How does this...
- China is contemplating a plan that would allow offshore yuan to be used in gold trading within the Shanghai Free-Trade Zone (FTZ).
- Gold imports into China are strictly controlled by the country’s central bank. This plan stipulates that gold be allowed physical delivery to a warehouse within the FTZ.
- According to Bloomberg News, the Shanghai Gold Exchange (SGE) is said to be proposing offshore yuan account trades in the three gold contracts it will offer, including bullion of 99.99% purity.
- These gold contracts will expand the range of investment options for yuan deposits around the world, which as of March were estimated at approximately 1.5 trillion yuan (US$240 billion).
- The SGE is seeking to establish an international gold trading platform to attract foreign institutional and private investors, and has been meeting with banks for feedback.
- Australia & New Zealand Banking Group Ltd. (ANZ) has voiced enthusiasm and views this development as a “great opportunity” to attract foreign investment.