Apparently the Chinese liked their gold futures on Shanghai this morning. June futures hit the maximum 10% limit change ($985US/oz) a few minutes after opening this morning. I wonder how long it will take a few enterprising Chinese banks to start buying physical gold in London and New York for US dollars and trading it in China. Might be a back door to move a bunch of China US forgein currencies into gold. I wonder how market in London will respond tomorrow morning?

Source:http://news.xinhuanet.com/eng...
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China's gold futures jumps to daily limit up upon debut


www.chinaview.cn 2008-01-09 09:19:50 Print

SHANGHAI, Jan. 9 (Xinhua) -- China's gold futures contracts launched on Wednesday all surged to the daily limit of 10 percent in minutes after the official debut trading started at 9 am at Shanghai Futures Exchange (SFE).

Seven contracts started trading on Wednesday, with the benchmark price set at 209.99 yuan (28.8 U.S. dollars) per gram by the SFE a day earlier.

The key contract for June delivery was the first to climb 9.98 percent to 230.95 yuan per gram, followed by limit-up surges of other contracts for July-till-December delivery.

The contract size was set at 1,000 grams, larger than originally expected 300 gm in order to discourage individual investors who lacked the ability to take risks.

Shang Fulin, chairman of China Securities Regulatory Commission (CSRC), stressed the financial nature of the precious metal and called for "joint efforts for the stable operation" of the new futures product at the launch ceremony held in Shanghai.

China is the third largest gold producer in the world, and the country's gold consumption in the manufacturing sector was about 9.2 percent of the world's total, according to Shang.
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.... Been There