Tuesday, November 27th 11:55 AM IST

China may delay Gold ETF launch

# Gold ETF  # SPDR Gold Trust  # China gold  

Chinese have already entered a study phase on regulation and operation for the launch.

BEIJING(BullionStreet): China might delay the scheduled launch of gold ETF trading on the Shanghai and Shenzhen stock exchanges to allow more time to prepare the market, analysts said.

They said China's also wanted to launch the interbank market along with gold ETF to fully tap the demand for the precious metal in the country.

They added that the Chinese have already entered a study phase on regulation and operation for the launch.

For the time being, the gold ETFs would be offered only on local exchanges, but there is a very strong potential for these products to open up to international trading.

Currently, investors’ only option that comes close to these proposed funds is the Physical Asian Gold Shares which stores its bullion in Singapore. But with more and more investors looking to store their gold overseas, China appears to be the most popular option out there.

China might also extend over-the-counter trading and improve the leasing market as domestic market matured and opened up for foreign investors.

Chinese banks have been increasing their gold trading on the domestic over-the-counter markets and are also allowed to trade gold on the international OTC markets for their own books but not allowed to trade on behalf of their clients.

China, world's largest gold producer, also imports the yellow metal in huge quantity but strictly regulates imports and exports and has so far only given licences to nine commercial banks, including Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and China Construction Bank.

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