China is poised to launch gold exchange traded funds (ETFs). Securities Regulatory Commission believes that gold ETFs will expand the selection of instruments for the investors.
China's rapidly growing gold market requires a greater amount of diversified investment instruments. The regulator has been preparing to open up to the global gold market and soon gold EFTs will be available to the Chinese investors. Gold EFTs are supposed to invest in the spot contracts traded on the Shanghai Gold Exchange.
As of today, gold EFTs are operated in most of the world's major financial markets, the total amount of which comprised 240 in July 2012 with a combined asset scale of more than $140 million.
Being the world's biggest gold producer and consumer, China produced 361 tons of gold and consumed 761 tons.
Investor appetite for using gold to hedge risks is growing amid inflation concerns and weakness of the stock exchange.
As a rule, investments in gold are made through buying gold bars. Apart from this, China is said to have 4 gold Qualified Domestic Institutional Investor funds (QDII) which make it possible for the Chinese investors to buy overseas gold assets.
