China, the world’s largest bullion consumer and producer, is considering allowing the use of offshore yuan in gold trading in the Shanghai free-trade zone.
The Shanghai Gold Exchange, the country’s biggest physical bourse for the metal, is proposing to let holders of offshore yuan accounts trade the three contracts it will offer, including bullion of 99.99 percent purity, according to a draft of the plan obtained by Bloomberg News. It stipulates that gold may be physically delivered into a warehouse in the zone. Gu Wenshuo, a spokesman at the Shanghai Gold Exchange, wasn’t available for comment when contacted by phone, text message and e-mail.
China started a free-trade zone in Shanghai this year as a testing ground for liberalizing interest rates and currency usage. The gold contracts will expand the range of investment options foryuan deposits around the world, which reached at least 1.5 trillion yuan ($240 billion) in March, according to Standard Chartered Plc estimates as of last month.