BNP Paribas bets on Chinese gold market as commodity is set to soar

BNP Paribas bets on Chinese gold market as commodity is set to soar
BNP Paribas has been granted membership of the main board of the Shanghai Gold Exchange, which will allow the bank to fully participate in the Chinese gold market by offering deeper liquidity and broader product scope.
The move comes as gold is rising on uncertainty over US-China trade talks and Britain's exit from the European Union.
"The risk is really quite high that the current UK government is steering towards a hard Brexit ... and in such a situation the investors seek safe haven and one of them is gold," quantitative commodity research analyst Peter Fertig told CNBC, adding prices could touch $1,550 or $1,600 in case of a harder Brexit.
Gold has soared this year on increased demand for havens as the US-China trade war damages global growth, prompting central banks including the Fed to adopt a more accommodative stance.  its price jumped from a summer low of US$1,385 an ounce to US$1,557 early last month. This year alone, gold is up just over 17%.
BNP will now participate in listed gold contracts, gold leasing and other gold derivatives business, and provide more services to its domestic and international client base.
"Through our participation on the main board, we hope to position China as a global center for gold trading," Mikko Russi, BNP Paribas head of FX, Local Markets & Commodity Derivatives for Asia Pacific, said.