My fellow Steemians,
Creation of such a gold trading corridor could boost demand for 1kg gold bars while also increasing turnover for yuan-denominated products, says exchange president.
The Chinese Gold & Silver Exchange Society (CGSE), Hong Kong’s gold exchange, is in talks with Singapore, Myanmar and Dubai to establish a gold commodity corridor to promote yuan-denominated products under China’s Belt and Road Initiative, according to its president Haywood Cheung Tak-hay.
“The successful linkages of such a gold corridor could probably boost demand from users and investors for kilobar gold,” Cheung said. “This may also increase the turnover of yuan-denominated products by two or three times.”
Cambodia was also likely to be involved in the discussions in the future, he added.
Turnover of Hong Kong’s gold market in the second half of the just concluded Year of the Rooster averaged between HK$150 billion (US$19.2 billion) and HK$180 billion per day, while averaging about 30 billion yuan (US$4.7 billion) to 40 billion yuan for yuan-denominated products, Cheung said.
The proposed bonded warehouse in Qianhai free-trade zone, near Shenzhen, capable of storing 1,500 tonnes of gold, is expected to provide custodial and physical settlement services, and is likely to materialise in the next two to three months after receiving the verbal green light from the customs department recently, Cheung added.
worldtimes24.com
Joseph Chan Ho-lim, Under Secretary for Financial Services and the Treasury, said that developing a Belt and Road gold industrial chain, and using the Greater Bay and Qianhai models can enhance Hong Kong’s status as an Asian and international hub for gold transactions.
“Although our economy is in an upward cycle, we need to solidify our advantages and open up new development areas,” Chan said.
CGSE offers Loco London gold based on the London Bullion Market Association, which is denominated in US dollars and typically around 400 ounces. But yuan-denominated kilobars, 1 kilogram gold bars, have gradually emerged in Shanghai, Qianhai and Hong Kong. So Cheung hopes a unified standard for gold kilobars can be created.
It was reported early this year that the World Gold Council was studying the possibility of creating a global standard for gold kilobars that can be deployed as collateral in futures markets and potentially encourage demand.
Gold, which typically is considered as a “safe haven” and has an inverse relationship with risker assets such as stocks, is likely to see increased in the second and third quarter of this year, said Cheung.
“I expect in the second half, the stock market may correct from highs on profit taking, and during that stock market volatility, gold is likely to pick up.”
He predicted that gold may rise towards the US$1,500 an ounce level if a support above US$1,300 can be formed.
Gold slipped 0.3 per cent to US$1,337.81 an ounce on Tuesday.
Thank you for reading!
When will the day come where China and Russia show there hand and lay out their tons of AG, and say goodbye to the USSA fiat system.
I think it will happen earlier than we can expect;)