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Thursday, 2nd March 2006 (7987 views)

The Bank of China will move to make buying and selling gold easier by slashing the trading spread on the precious metal for 13 weeks, according to local press reports.

Citing unnamed officials at the bank, the Shanghai Daily reports that the trading spread on gold may be cut by up to a fifth.

The new policy will come into force next Monday (March 6th), lasting until May 27th, the paper reported.

The move is part of China's drive to cut the costs and complexity associated with buying and selling gold in the world's most populous country.

Later in 2006, the bank will also commence a trial allowing accounts held in US dollars to trade in gold, in a bid to hammer down foreign exchange risk.

China's gold trading volume increased 36 per cent in 2005. The president of the Shanghai Gold Exchange, Wang Zhe, said recently that he believed the country "has the potential to be one of the biggest gold markets in the world", according to the Financial Times.

 

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