Monday, 18th July 2005 (3375 views)

The Shanghai branch of the Industrial and Commercial Bank of China (ICBC) has launched individual gold spot trading.

The move follows over ten months of piloting at its sub-branch in the city's Pudong District.

An unnamed official in the gold investment department of ICBC Shanghai told Interfax the gold spot trading business was being operated in collaboration with the Shanghai Gold Exchange (SGE).

The minimum purchase volume is set at 1000 grams gold – higher than in other forms of gold trading – and at present the only trading form is Au99.99 gold.

"The main purpose for increasing the purchase volume requirement is to control risks during the gold trading business," explained the official.

"After all, the Shanghai Branch is the first among the ICBC's branches to start individual gold spot trading business, so we have to be very cautious about potential risks," she added.

The trading price per gram is equivalent to the price on the SGE, meaning that based on the current gold price of RMB 110/g (USD 13.29/g), customers need to pay at least RMB 110,000 (USD 13,289.84) for each purchase of gold from the ICBC.

But despite this high threshold the official said she did not think investors would be discouraged.

She explained customer feedback during the trial period showed that "high-income citizens are our target customers".

"I believe there are a large number of high income citizens in Shanghai who are interested in gold investment, especially when the stock market is disappointing," she added.

 

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