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CBRC opens up Chinese domestic gold futures trading

Chinese commercial banks will be able to trade gold futures in the domestic market for the first time following an announcement by the China Banking Regulatory Commission (CBRC).

The banks will be able to apply for a trading permit, as long as they meet certain standards which have been put in place to guarantee safety. These include having capital adequacy ratio of eight per cent or above and possessing qualifications to trade derivative products, according to official state news agency Xinhua.

China has been trading in gold futures since January, but the CBRC had banned domestic banks from doing so until now.

Hu Yuyue, a financial expert from Beijing Technology and Business University, voiced his enthusiasm at the news.

"[This is] great news for the gold futures market," he said, according to Xinhua. "[It will] improve competitiveness against overseas banks as financial derivatives are supposed to be the largest revenue resources for leading banks."

China is currently the world's biggest producer of gold bullion, having surpassed South Africa in 2007, according to GFMS.

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