Research On Improvement Of China's Financial Gold Market

Being a member of commodity family, gold is somewhat different form other commodities, as it also boasts some financial nature. First, like any other investment products, the investment value of gold is embodied in the form of bid-asked spread. Gold prices will fluctuate largely in the short term due to various market factors, and investors can make great benefits as long as they find the proper trading time. Second, gold has some unique financial qualities which set it apart from other investment products. On the one hand, gold is considered an indexed financial product due to its stable price level in the long run; and on the other hand, gold can play an important part in maintaining portfolio value and dispersing financing risks also because of its price-steady quality.The financial features of gold have being greatly used on the international gold market. However, on domestic gold market, there are still a lot of problems remaining to be solved. Take the Shanghai Gold Exchange as an example, most trades happened in SGE are still in the form of spots with real trading background; most participants are gold producers, manufacturers and traders, with few institutional investors and individual investors are not allowed to directly take in part of gold trading. Besides that, the products designed for investment is limited. All these have put a negative impact on the progress of China's financial gold market.This thesis firstly pointed out the problems existed on domestic gold market in the aspect of financial features, including the lack of market investors and investment products, the flaws of the market trading mechanism, low level of internationalization and bugs in gold banking. Finally, it gave out some suggestions on how to improve China gold market to fully demonstrate its financial features.