Hong Kong launches offshore CNY-denominated gold product

Renminbi Kilobar Gold, the world’s first offshore Renminbi-denominated spot gold contract ends initial trading with value of CNY111.7mn.

The Hong Kong-based Chinese Gold and Silver Exchange on Monday started trading of the Renminbi Kilobar Gold, which it said was the world's first offshore Renminbi-denominated spot gold contract.

The first physical settlement premium was 800 yuan (125.59 U.S. dollars) per kilogram, determined by Tony Lui, director of Wing Fung Precious Metals Limited.

In the first trading day, the amount of gold settled was 322 kilograms, at a settlement price of 346.95 yuan per gram, with a value of 111.7 million yuan, according to the exchange.

Speaking on the Renminbi Kilobar Gold launch, Chinese Gold and Silver Exchange president Haywood Cheung said the roll-out of Renminbi Kilobar Gold marks a big step forward by the exchange on the road to internationalization -- the diversification from 99 Tael Gold to 999.9 fineness Gold, and the extension of quote and settlement currency from the Hong Kong dollar to RMB.

The product, he said, could "truly help promote the internationalization of the renminbi, and attract overseas and local gold dealers to engage in arbitrage activities to capitalize on price spreads. In addition, this product offers investors a new-found opportunity to participate in leveraged trading of renminbi."

View the full story in CRI English.