Will paper gold click with heavy metal fans?

ICBC, with its eye apparently on the mobs of mainland shoppers buying all the gold chains they can from Hong Kong jewellery shops, has launched yuan "paper gold".

What is paper gold? It is a piece of paper by which ICBC promises to pay you returns that track the price of gold. If you own the investment for a year and gold rises 20 per cent in that time, the bank is obliged to pay you that full return.

ICBC previously offered a Hong Kong dollar version of this investment. Its latest twist is to price it in yuan. This was partly to make it attractive to mainland investors, who have watched the price of gold fall 9 per cent since the beginning of last month, and are snapping up the metal on the perception that it is cheap.

"The mainland customer is a main focus," says Patrick Yang, a wealth management product head at ICBC (Asia), of the bank's paper gold launch.

No doubt, gold is the asset of the moment. Jewellery stores are running out of stock. The Chinese Gold & Silver Exchange Society says demand for physical gold in Hong Kong is five times normal levels.

ICBC was working on its yuan paper gold instrument for years, says Yang, and it was a stroke of very good luck that it was able to launch the product amid a flurry of excitement for the metal.