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Investors eye sparkle of golden earnings

SCORES of new investors are swarming into gold trading as they are lured by the metal's rising prices, which recently touched a record high, banks said yesterday.

More than 10,000 individual investors have opened gold trading accounts at China Merchants Bank in Shanghai since April 20 when the bank launched its trading business, and it said the response was better than expected.

"The rising prices of gold helped boost the gold trading volume," said Zhao Wei, gold trading manager of the bank's Shanghai branch. "We are lucky with the timing of the launch of gold trading."

It was good timing when the Shenzhen-based bank introduced individual gold trading linked to the Shanghai Gold Exchange in late April when gold prices started to rise from a low of about US$864 an ounce. Gold prices have gained 11 percent since then.

The Shanghai branch of the Industrial and Commercial Bank of China also saw a similar boom in gold trading.

"The turnover in gold trading, including paper gold, is increasing amid the recent round of rising prices," said the bank's Shanghai branch. But the bank declined to disclose figures.

ICBC is the first bank in China to allow individuals to trade gold.

Gold hit an intraday high of US$992 an ounce this week. Analysts said they see the yellow metal's price hitting US$1,000 an ounce soon, although they admitted there would be pressure to take profit at this point.

Gold hit a record high of US$1,003 in early last year and tested the US$1,000 high again in February.

Judy Zhu, a Standard Chartered commodity analyst in Shanghai, forecast the average price of gold at US$975 an ounce this year and US$1,100 an ounce next year.


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