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| Association Wants to Set up Gold Fund |
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If successful, the fund, which is still at the proposal stage, will be the country's first gold investment fund. International Finance News, a Shanghai-based business newspaper, reported earlier this week that the China Gold Association (CGA) is considering setting up a fund with other partners, who include commercial banks and gold miners, citing Hou Huimin, the CGA's vice-chairman. "The (setting up of the) fund is still in its research and study phase," Lu Wenyuan, secretary-general of the CGA, said yesterday, declining to elaborate. "We are still in discussion with other parties on the issue and have not yet started formal work on the project," Lu said. The fund, which is expected to pool between 500 million yuan (US$62million) and 1 billion yuan (US$124 million), will mainly invest in gold products traded on the Shanghai Gold Exchange, while investment in domestic and overseas gold futures markets will be the next step, according to International Finance News reports. Currently, there is no gold futures trading in The introduction of the proposed gold investment fund, analysts and experts say, will provide a boost to the gold market. "The timing (of establishing the gold fund) couldn't be better as the recent gold price surge has caught the attention of investors, both incumbent and potential ones," said Cui Lin, a gold analyst with Antaike Information Technology Development Co Ltd, a Beijing-based metal industry consultancy. "Investors' heightened attention will make it easy for the proposed fund to attract investment," said Cui. The price of the metal, after topping US$500 per ounce last November, hit a 25-year high of US$574.6 an ounce earlier last week. "The coming of institutional investors in the gold market is certainly a boost to its development, but the introduction of more products and market reforms is even more critical to the growth of the gold market," said Cui, the gold analyst. The setting up of a gold fund will help spread gold investment awareness among "More people will become familiar with gold investment if a gold fund exists," he said. "Only when more investors wade into the market will it become more active." Gold, mainly used in jewellery and as an investment, fell 3.7 per cent in Gold price on Shanghai Gold Exchange witnessed small rise yesterday. (
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