In the global gold market, China is a major player. The Shanghai Futures Exchange (SHFE) has made major advancements that allow foreign investors to trade gold and other precious metals directly on the SHFE’s local marketplace.
These changes are part of a larger plan to give China more control over the world gold price.
The SHFE made 34 recommendations to improve openness, facilitate international access, and improve gold trading.
Furthermore, international traders can now access the Chinese gold market without the need for local middlemen.
In the end, they are able to show margins in both US dollars and other currencies.
Tiger Shi, the CEO of BANDS Financial, believes that this evolution represents an important change in China’s financial transparency.
The general population can offer feedback on the newly introduced regulations till June.
China Plans to Control the World’s Gold Prices
The majority of gold pricing is still controlled by London and New York, despite the fact that China buys and uses more gold than any other country.
To combat this, China’s central bank and the three government agencies announced a plan in April to support Shanghai’s gold trading center.
This program promotes the adoption of yuan-based gold prices globally and looks into new logistics and storage facilities abroad.
China intends to do this in order to directly compete with the London Metal Exchange (LME), which has been setting the world’s gold and metals prices for more than a century.
China might move the world’s gold pricing power eastward if it is effective.
Imports of Gold Rise as the Market Develops
At the same time, China’s gold purchases are growing quickly. In April, Hong Kong brought in 43.5 metric tons of gold, the biggest in 14 months.
This is a substantial increase above the meager 4.9 tons in March.
Experts say the primary forces behind this growth are rising gold prices and strong demand from institutions and individual investors.
The People’s Bank of China even raised its gold import quotas to meet the demand.
Amid rising global gold prices, China purchased 127.5 metric tons of gold in April, a 73% increase over the previous month.
It is clear that China is not only expanding its gold market.
Additionally, it is positioning itself to lead the global conversation on gold’s price and trading.
