China retains world's largest spot gold trading market for 8th year

China has retained its lead as the world's largest market for spot gold trading for the eighth year, as growing participation by offshore investors fueled trade growth, the Shanghai Gold Exchange said Thursday.

Trading of gold surged 166 percent during the first half this year to 17,520 tonnes, while that for silver jumped 151 percent during the same period to 380,000 tonnes.

Trading of bullion and silver totalled 4,764 and 525 tonnes respectively at an international board set up for offshore investors in the Shanghai Free Trade Zone in September.

The World Gold Council estimates demand for bullion from China and India, the world's top two buyers, will stand between 900 to 1,000 tonnes this year.

Other than being the world's largest producer and consumer of the precious metal, China is also striving for a greater say in the pricing of gold.

The Shanghai Gold Exchange will establish gold fixing denominated by the Chinese currency renminbi by the end of this year in a bid to compete with London and the U.S. Comex over pricing of the precious metal.

Currently the pricing of gold is dominated by western markets, as markets in Britain and the United States account for more than 90 percent of gold traded. Meanwhile, China's onshore gold market takes up 4 percent of global turnover in 2013, according to ANZ.

"The opening up of China's gold market to international investors could provide a sharp boost to trading volumes on the exchange," said ANZ chief economist Warren Hogan in a March research note.

"The tendency of the Chinese market to trade at a discount or premium to the global spot price could also attract investors to the exchange, with the pricing of the contracts in renminbi being another attractive aspect," Hogan said. Endi