China approves gold futures trading

2007-12-28 08:38:45 Xinhua English

BEIJING, Dec. 28 (Xinhua) -- The Shanghai Futures Exchange (SFE), one of China's major futures trading agencies, is expected to launch gold futures trading soon following regulatory approval.

The China Securities Regulatory Commission approved the gold futures trading on the SFE, a statement posted on its website said on Friday. However, it did not say when the trading would be started.

The launch of gold futures on the SFE would add to the hedging options for gold producers against the fluctuating global market, analysts said.

Gold prices have fluctuated strongly, prompting gold producers, financial institutions and investors to avert risks through futures trading.

The SFE said earlier it would adopt strict regulations on the risk control of gold futures after it initiated preparation work in September with commission approval.

It would ask for a minimum margin requirement of seven percent of the contract value, and clamp firmly on the daily price fluctuations, probably within the range of plus or minus five percent of the previous settlement prices.

Gold was the second new futures product to be introduced to the country's futures market this year. The first was zinc that launched trading in March.

Last year, China produced a record 240 tons of gold, a growth of 7.15 percent year-on-year. In the first nine months of this year, it produced 191.456 tons of gold, an increment of 22.175 tons, or 13.1 percent, from the same period last year.