China’s government announced it will loosen restrictions on imports and exports of gold amid strong internal demand for the metal.
Experts say the move will boost gold trading in China and support prices, which reached a record of about $1,265 an ounce in June. Spot gold was at $1,185.35 late in New York on Tuesday.
“This statement is the clearest spelling out of the government's attitude toward developing the gold market," Hu Yanyan, a gold analyst with Everbright Futures, told The Wall Street Journal.
"It addresses areas that the industry has widely regarded were blind spots in how the government has viewed the sector."
China represents the second largest buyer of gold in the world after India. It has boosted gold imports in recent years, with the supply going to the central bank and investors.
But even so, imports totaled a modest 31 metric tons last year, according to private estimates, the Journal reports.
China also is the world’s biggest gold producer, and output may rise 5 percent this year from 313 tons in 2009, Song Quanli, deputy party secretary of China National Gold Group, told Bloomberg.
Gold purchases should rise in the wake of the government’s new policy, experts say.
“(The moves) are extremely encouraging and seem certain to lead to increased gold demand in a country that has recently been contending with India for position of the largest consumer of gold in the world,” George Milling-Stanley, director of government affairs at the World Gold Council, told Bloomberg.
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