Gold trading to open up to foreigners in Shanghai

The Shanghai Gold Exchange is poised to get the jump on other mainland equity and commodity trading bourses by launching a gold trading platform in the city's free-trade zone open to foreign investors.

Rules on the gold exchange's "international board" are being reviewed by the central bank and the foreign exchange regulator, and an imminent approval is expected, according to exchange officials.

The platform, likely to get under way in the second half of this year, will mark a major breakthrough in the development of the free-trade zone, the mainland's first free port.

The trading platform and the warehouse will be run separately from the existing trading system in Shanghai's downtown Huangpu district, and the products will be denominated in yuan, part of Beijing's efforts to internationalise the currency.

Spot and forward gold trading will be conducted on the "international board" as analysts foresee a keen interest from foreign traders.

Foreign players will be invited to conduct gold trading, with liberalisation in the sector seen as creating arbitrage opportunities for them.