CHINA'S GOLD MARKET: ERA OF PERSONAL INVESTMENT

Basis for personal investment

According to statistics, there is over 12 trillion yuan currently in domestic residents' savings accounts, indicating the huge potential for personal gold investment. Chinese people have a tradition of using gold in family finance. The limited investment channels for personal investment may help gold to become a major avenue of investment. The inverse relationship between gold and securities and economic situation may help ward off risk for individuals who keep gold in their portfolios. The domestic gold price mirrors the trend in the global market, which shows a stronger stability.

Varieties for personal investment

Gold decorations: With high aesthetic and utility value compared with investment value, investing in gold decorations has lower yield according to investment theories.

Gold coins: Investment coins offer a wide range for choice and high liquidity, but are harder for safekeeping. Monumental gold coins have a high investment value, but while their price in the secondary market is generally high, their value is subject to large fluctuations.

Gold bars: The price for gold bars is basically the same as international gold; therefore, these bars can be easily traded all over the world, thus constituting a good choice for investment.

Book-entry gold (paper gold): Book-entry gold is the most appropriate variety for personal investment due to the ease of operation, high ratio of fund utilization and low commission.

Prospects for personal gold investment

Demand for physical gold (gold bar) will rise markedly immediately after the opening of the market, with a certain proportion of investors collecting bullion.

Book-entry gold will gradually become the market mainstream.Aiming at regulated gold investment market, the Shanghai Gold Exchange is currently devoted to the development of a secondary system designed to handle personal gold trade via the agent of commercial bank members.

Market development needs to be supported. As the organizer of China's gold market, the SGE must depend on the support and policy guidance from relevant departments and spare no efforts in market promoting, in order to fully realize personal investment in the gold market.