Shanghai Gold Exxhange to trade SilverShanghai Gold Exchange to start silver trade
March 11 2006
HONG KONG, Fri: The Shanghai Gold Exchange is preparing to start silver trade, which will set the benchmark for Chinese prices, industry sources said today.
The new product could increase China's investment demand for silver and reduce its exports, they said.
China exports about two-thirds of its silver production.
"We have been studying that since last year," an exchange official said, referring to the silver trade.
He added that the exchange did not set a deadline to start the trade.
The exchange, under the administration of the central bank, was drafting guidelines for the silver trade and modifying its computer systems, he said.
Currently, the exchange trades spot gold with options for forward delivery.
Industry officials expect the exchange to start the silver trade as early as June, since world silver prices have stayed at multi-year highs and investors were keen to trade.
Although it would be called spot trade, delivery for the silver would be allowed to extend as long as 120 days, equal to a three-month contract, they said.
Spot silver is already traded on Shanghai Platinum & Silver Exchange, run by a state owned company. But traders said many people did not use the marketplace due to its illiquidity. - Reuters