Gold exchanges in China outside of two in Shanghai are to be banned, authorities said in a statement released on Tuesday.

 

Gold exchanges have mushroomed across China, from the northern port city of Tianjin to Guangxi bordering Vietnam, as spot prices in the precious metal [XAU=  1531.79    -23.40  (-1.5%)   ] have soared to record highs and speculation has boomed.

"No local authority, institution or individual is allowed to set up gold exchanges," said the notice dated December 20 and jointly issued by the People's Bank of China, the Ministry of Public Security and other regulators.

The notice — published on the central bank website (www.pbc.gov.cn) — said the Shanghai Gold Exchange and the Shanghai Futures Exchange are enough to meet domestic investor demand for spot gold and futures trading.