China grants gold import licenses to foreign banks for first time: sources

Wed Jan 15, 2014 2:15am EST
 
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By A. Ananthalakshmi and Fayen Wong

SINGAPORE/SHANGHAI (Reuters) - China has granted licenses to import gold to two foreign banks for the first time, sources said, as moves to open the world's biggest physical bullion market gather pace.

Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations.

China's gold imports more than doubled last year to over 1,000 tonnes - ousting India as the biggest buyer - as demand soared to unprecedented levels due to the first drop in international prices in 13 years.

ANZ (ANZ.AX: Quote) and HSBC (HSBA.L: Quote) were awarded import licenses late last year, two sources with direct knowledge of the matter told Reuters.

Other trading sources said China Everbright Bank (601818.SS: Quote) has also received approval to join the nine local banks already allowed to ship gold into China. Beijing strictly controls how much the banks import through a quota system.

ANZ and HSBC declined to comment. Everbright could not immediately be reached for comment.

"China is actually increasing its transparency. I think there will possibly be further access to other banks as well," said Cameron Alexander, manager of Asian precious metals demand at metals consultancy GFMS, which is owned by Thomson Reuters.

China faced a supply crunch early in 2013 when a sharp plunge in gold prices released pent up demand that eroded inventories at banks and jewelry sellers.   Continued...

 
A mainland Chinese visitor tries on a 24K gold bracelet inside a jewellery store at Hong Kong's Tsim Sha Tsui shopping district in this April 24, 2013 file photo. REUTERS/Bobby Yip/Files