Mainland China's gold prices hit new high, up 3%

Gold prices in mainland China hit a new record high on Monday, up 3%, after global gold prices were lifted up to US$1,030 per ounce, market sources reported.

There was a dramatic increase in gold trade on the Shanghai Gold Exchange yesterday. The price of Au 99.95 closed at RMB 233.17 per gram, edged up RMB 6.25 with a record intraday high of RMB 234.50 per gram. The price of Au 99.99 closed at RMB 233.59 per gram, an increase of RMB 6.69/g.

The significant price hike was partly caused by the U.S. subprime mortgage crisis, which was highlighted in the deal that JP Morgan Chase would buy the stricken U.S. bank Bear Sterns for US$250 million, an equivalent of US$2 per share.

Analysts predicted that China's gold prices would maintain the upward trend, as demand in China remained strong and domestic investors were seeking protection against further weakness in the U.S. dollar.