Hong Kong’s Chinese Gold & Silver Exchange Society and its counterpart in Singapore have reached a preliminary agreement to launch a direct link in the trading of the precious metal between the two cities.
Steven Chan Sheung-chi, president of the exchange society, said the link will be launched in June at the earliest, the Hong Kong Economic Journal reported.
The initiative will later be expanded to include Shanghai through the Shanghai-Hong Kong Gold Connect that was established last year, Chan said.
However, given the small disparity between the gold prices in Singapore and Shanghai, it is unlikely the link will lead to an upsurge in arbitrage activities, he said.
The Shanghai-Hong Kong gold trading link will be modified in March or April to provide more renminbi-denominated physical trades, which are expected to boost transaction volumes to about 100 tons this year.
The Hong Kong industry body is also setting up a storage in Shenzhen that will start operation in two years with an investment of HK$1 billion.
Meanwhile, Chan expects the price of gold to hover around US$1,000 to US$1,300 this year.
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