Jeweler to launch gold for investment

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Last updated at: (Beijing Time) Monday, December 15, 2003

Jeweler to launch gold for investment

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Shanghai Laofengxiang Co Ltd, the largest and oldest jeweler in the city, will issue 654.64 kilograms of gold bars and nuggets on Saturday, becoming the first local jeweler to offer investment-grade gold.

Laofengxiang plans to sell 99.99 percent pure gold bars or nuggets in three sets to celebrate its 155th anniversary this year. The firm will offer 155 one-kilogram gold nuggets, the heaviest of its new offerings, at six of its 36 outlets in the city from Saturday and booking starts today.

"The investment-grade bullions will not only meet the demand of gold investors but can be a good alternative as a present or for collection," said Wang Ensheng, vice general manager of Laofengxiang.

The retail price of the bars will be between 118 yuan (US$14.22) a gram and 125 yuan a gram. The price for 99.99 percent pure gold finished at 108.28 yuan a gram on the Shanghai Gold Exchange last Friday.

Customers can sell these products back to Laofengxiang when they want to cash out. But they have to wait three months starting from today before they can do so.

The buy-back price is dependent on the previous day closing price on the Shanghai Gold Exchange, the country's sole gold exchange. No commission fee will be charged.

Laofengxiang is the second firm to issue investment-grade gold in the city, after China Gold Coin Inc, the country's sole wholesaler of gold bars and coins.

Shanghai Gold Coin Investment Co Ltd, the distributor of China Gold Coin, had also planned to issue investment-grade gold bars for the coming "Year of the Monkey" according to the Chinese lunar calendar in Shanghai at the beginning of this month.

However, the issue was delayed to last weekend. Shanghai Gold Coin said they will be able to provide less than 40 kilograms of bullions to the local market.

"It is because consumers from north China have almost booked most of the bars, draining our stocks to provide gold bars to customers in Shanghai," said Chen Kui, vice general manager of Shanghai Gold Coin.

Shanghai Laomiao Jewelry Co Ltd, another major local jeweler, is also planning to issue gold bars for the "Year of the Monkey" before the end of the year, said Zhou Min, a senior executive of Shanghai Laomiao.

In November, the gold price rose above US$400 per troy ounce (106.75 yuan a gram), the highest in the global market since March 1996.

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