As of yesterday, no gold bars were sold back to China Gold Coin Co since the buyback plan started on Monday. It was the first time on China's mainland in more than five decades that individuals could sell back their gold to the company from which it was originally purchased.

In December, China Gold Coin, the country's sole wholesaler of gold bars and coins, began a promotion to sell investment-grade bullion in either 50- or 100-gram pieces. It was met with lukewarm response in Shanghai.

"It is not strange that people would be unwilling to sell because the offered price is lower than the price when the bullion was first sold," said Tao Yong, sales manager of China Gold Coin's Nanjing Road W. outlet, the only shop assigned to conduct the buyback exercise locally.

"People do not want to lose money if it is not an extreme emergency."

The buyback price stood at 93.88 yuan a gram (US$351.77 per ounce) yesterday. The gold bars were originally sold at 105 yuan a gram in December when jitters over the pending Iraq war sent the price for the precious metal near a six-year high of US$357 per ounce on the world market.

China Gold Coin adjusts its prices daily in tandem with the floating mark on the Shanghai Gold Exchange. The price is set at 98 percent of the day's trading price on the exchange.

The introduction of the buyback has signaled the start of the government's move to gradually deregulate the gold market. Individuals have not been allowed to trade bullion since 1949.

Shanghai Gold Exchange, the only spot gold trading house in China, said it is likely that individual gold trading will start at the end of this year after a complicated process of preparation work is completed.

Individuals will be allowed to buy or sell bullion, or trade in deposit accounts through commercial banks which act as agencies between investors and the exchange.

(Shanghai Daily June 18, 2003)