Gold council meeting seeking way to market deregulation

The World Gold Council (WGC) is to host a ground-breaking meeting with officials from the People's Bank of China and other government departments in a move seen as a strong indication of Beijing's willingness to start slowly liberalising its gold market.

The meeting is regarded by the gold industry as the culmination of intense lobbying by industry bodies such as the WGC and gold-mining companies who are hoping liberalisation in the mainland will give a much-needed boost to the gold market.

Gold is trading at 20-year lows following the revelation last month that the Bank of England is planning to more than halve its stockpile to 300 tonnes.

Despite tight regulations in the mainland market, demand for jewellery - which makes up the bulk of gold holdings in the mainland - has risen more than sevenfold between 1989 and 1997.

Per capita consumption, however, is still only 0.2 grams compared with 0.6 grams in India and nine grams in Hong Kong.

The relatively low consumption levels in the mainland has seen it become a prime target for the industry.