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SHFE Extends Gold-Trading Hours As China's Market Continues To Develop

By Kitco News
Tuesday July 9, 2013 12:24 PM

(Kitco News) - The Shanghai Futures Exchange launched after-hours trading in gold this week and initial volume was described as high, all of which observers say reflects the country’s growing role in the gold market.

“It’s one more indicator of China’s significant interest in gold and desire to become a global force in the gold market,” said Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic consultant to Rosland Capital. Nichols provides consulting services for a number of entities in Asia, including China.

The country has been looking to expand its gold market infrastructure and participation to become one of the leading marketplaces for gold, Nichols said. The move also helps the exchange meet competition from others in the region, he added.

“None of this is happening by accident,” he said. “China wants to be a global leader in a wide variety of financial markets, with gold being one of them.”

According to Bloomberg, volume for the December contract was 224,320 for the five-and-a-half hour trading session that began at 9 p.m. local time Sunday. The average for the regular four-hour trading day in June was 87,129.

The extended hours could increase global participation in the gold market, said Bill O’Neill, one of the principals with LOGIC Advisors.

“It’s like the ETFs, although it won’t be of that magnitude,” he said. “They increased the players in the market. It could be a positive; it could be a minus in the market as it could add some volatility to overnight trade as well.”

By Allen Sykora of Kitco News asykora@kitco.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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