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The mainland, the world's largest bullion consumer and producer, is considering allowing the use of offshore yuan in gold trading in Shanghai's free-trade zone.
The Shanghai Gold Exchange, the country's biggest physical bourse for the metal, is proposing to let holders of offshore yuan accounts trade the three contracts it will offer, including bullion of 99.99 per cent purity, according to a draft of the plan.
It also proposes that gold may be physically delivered into a warehouse in the zone.
Gu Wenshuo, a spokesman at the Shanghai Gold Exchange, was not available for comment.
Shanghai's free-trade zone was launched in September last year as a testing ground for liberalising interest rates and currency usage.
The gold contracts will expand the range of investment options for yuan deposits around the world, which reached at least 1.5 trillion yuan (HK$1.85 trillion) in March, according to Standard Chartered's estimates as of last month.
The Shanghai exchange wants to establish an international gold trading platform as part of the liberalisation of the country's gold markets and to attract foreign institutional and private investors, according to the proposal.
The exchange is meeting with banks including Australia & New Zealand Banking Group and Standard Bank to obtain feedback on the plan, according to people who asked not to be identified because the information is confidential.
ANZ was keen to explore cooperation in the free-trade zone's gold market and saw the development of a new exchange as being "a great opportunity" to entice foreign investment to China's physical gold market, said Stephen Ries, the Melbourne-based head of media relations at the bank.
Standard Bank does not comment on "market speculation", said Erik Larsen, a Johannesburg-based spokesman.
The People's Bank of China has recommended that financial institutions in the zone be allowed to trade on exchanges in Shanghai, without suggesting a time frame for the change.
The central bank removed a cap on foreign currency deposit rates in the area from March 1.


Beijing mulls use of offshore yuan in gold trading

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Commodities

Platform being considered for free-trade zone in Shanghai as part of moves to liberalise markets


The mainland, the world's largest bullion consumer and producer, is considering allowing the use of offshore yuan in gold trading in Shanghai's free-trade zone.


Beijing mulls use of offshore yuan in gold trading

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Platform being considered for free-trade zone in Shanghai as part of moves to liberalise markets

Platform being considered for free-trade zone in Shanghai as part of moves to liberalise markets