The gold price which hit the lowest of less than 130 yuan a gram at the end of 2005 rebound to its highest on Jan. 9, 2006 since gold trading was launched in China. At the Shanghai Gold Exchange, AU999 and AU9995, two major types of standard gold for trading, closed at 140yuan a gram on Jan.9, up 3.63 yuan and 3.79 yuan from the previous day respectively.

Zhang Bingnan, Director of Beijing Gold Economic Research Institute, believed that the gold price hike on China market was related with the price on the international market. Gold price peaked at 544.05 USD/ounce for a while on Jan.9 on the world market, which was a new high in 25 years. The weak dollar will likely push the gold price even higher for the medium and long-term period.

Some investors are concerned about the prospect of another slump after the hefty increase. In mid-December last year, for example, the gold price on the domestic market rose to 139 yuan a gram while the price on the world market jumped to a 23-year record high of 541 USD / ounce. But it fell back to 129.63 yuan a gram soon.

Zhang thought that was just a transient adjustment following a rise. He predicted that gold price would be driven up further for the medium and long-term period by the tight gold supply on the international market and the weak dollar.

By People's Daily Online