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China to make gold trading easier

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China to make gold trading easier E-mail | Print | RSS Feed | Disable live quotes By Chris Oliver, MarketWatch Last Update: 7:52 AM ET Mar 1, 2006 HONG KONG (MarketWatch) -- The Bank of China will slash the trading spread on gold trading by up to 20% for 13 weeks beginning next Monday and running until May 27, according to reports carried in the Shanghai Daily Wednesday. The move is part of two reforms designed to make the buying and selling of gold easier and less expensive, the paper said, citing unnamed officials at the bank. Starting later this year, the Bank of China will run a trial program allowing holders of U.S. dollar accounts to trade gold. China already allows investors to buy and sell gold through Chinese currency accounts, denominated in yuan,, though the sales are based on the dollar value of the metal on international markets. Expanding trades to U.S. dollar accounts will help ward off foreign exchange risk, authorities were reported as saying by the paper. The development comes as China faces growing pressure to allow the yuan to appreciate against the U.S. dollar. U.S. Treasury Undersecretary Timothy Adams, who visited Beijing recently, repeated calls on Wednesday for China to let the yuan fluctuate more, however he stopped short of saying he would lobby others to label China a currency manipulator in a report due in April. On Wednesday the yuan set a post post-revaluation high against the dollar for the fourth consecutive session, trading at 8.0369 to the dollar. The yuan has now strengthened 0.91% against the dollar since it was revalued to 8.11 per dollar in July. In theory the yuan can rise or fall 0.3% on a daily basis, but in practice it has only moved a fraction of that range in daily trading. End of Story Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.