Tuesday the Chinese government backed Shanghai Gold Exchange (SGE) brought forward the launch date of its international gold trading platform which is hosted in the city’s free trade zone (FTZ) . The gold trading platform will be known as the ‘international board.’
In a surprise announcement, the SGE said today that the international board will go-live this Thursday September 18, eleven days ahead of its original launch date of Monday Sept. 29.
The bourse will launch three yuan-denominated physical gold contracts, of 100 grams, 1 kg and the bigger London gold delivery bar weighing 12.5 kg, Xu Luode, chairman of the exchange said at a precious metals conference in Beijing.
The exchange’s progress is being closely tracked by the global trading community as gold is one of the first commodities that China is opening up to foreign players by allowing them to participate directly in physical trade and to use offshore yuan.
The location of the SGE international board in the Shanghai free trade zone is symbolic in that this location has been earmarked by the Chinese government as part of financial sector internationalisation strategy.
The SGE is opening a precious metals vaulting facility in the free trade zone with a 1,000 tonne capacity limit.
Local government authorities and the People’s Bank of China’s Shenzhen branch also approved the exchange’s plan to build the 1,500-ton facility to store gold and silver in Qianhai, a special economic zone on the west of Shenzhen, according to Haywood Cheung, president of the CGSE. Construction will begin next year and take about 18 month.
Singapore has delayed the launch of its gold contract to October, two other sources said. The 25-kilogram contract was set to be launched on the Singapore Exchange this month. The delay was due to technical issues in setting up the trading system.