Capital Gold Group Sees Golden Opportunities in HSBC China's Debut on SGE

LOS ANGELES (Map) - LOS ANGELES, June 16 /PRNewswire/ -- Capital Gold Group, Inc.'s foreign precious metals provider and depository, HSBC Bank (China) Co. Ltd., debuted on June 5, 2008, on the Shanghai Gold Exchange (SGE), becoming the first foreign bank to trade gold on China's only spot gold trading bourse, an SGE official reported today.

Jonathan Rose, President and CEO of Capital Gold Group, believes the opening of Shanghai's gold market to overseas banks represents a major effort to help increase the liquidity of the domestic gold market and bring in the foreign expertise that can promote the development of the China market in the longer term.

Capital Gold Group is initiating opportunities in China to co-venture with existing gold producers and distributors to bring investment grade gold to agents from emerging economies through its association with HSBC.

CGG established their Asian presence in early 2007 by sponsoring the Financial Advisors Annual Conference in the Malaysian capital of Kuala Lumpur. The conference drew Financial Advisors from China, Hong Kong, Thailand, India, Taiwan, Singapore and Indonesia. As a result, CGG developed their Gold Affiliate Program for financial advisors, allowing for physical gold storage and delivery throughout Asia.

With gold prices reaching new historical highs, investors are flocking to gold as a safe-haven amid inflation fears and global uncertainty, including the worldwide sub-prime mortgage crisis. Investors in China and other Asian countries are diversifying with physical gold investments as a hedge against the inflationary pressures on the booming Chinese economy.

China's domestic gold market began opening up last June, when five foreign banks, HSBC, Standard Chartered, the Bank of Nova Scotia, UBS AG and Societe Generale, were granted preliminary approvals from the Peoples Bank of China (PBOC) to become SGE members. However, it has taken almost a year for HSBC to begin trading gold on the SGE after receiving preliminary approval from the PBOC. The lengthy assessment period was to ensure that the opening of the domestic gold market is in the nation's interests. The increased participation of banks will expand market liquidity while making arbitrage between the domestic and international markets more common.

Richard Yorke, Group General Manager, President and Chief Executive Officer of HSBC China, said: "HSBC is pleased to be the first foreign bank to conduct a transaction on the Shanghai Gold Exchange. The opening of the gold market to foreign bank participation is another exciting development for China's financial markets. HSBC China is pleased to remain at the forefront of new market developments. Our trading at the Exchange will enable us to share our international experience and expand our participation in China's financial markets as well as our service scope."

The Shanghai Gold Exchange and The Shanghai Futures Exchange, which opened in January, 2008, are reporting new record volumes of gold investment activity amid rising gold prices worldwide. China has now overtaken South Africa as the worldwide leader in gold production according to the World Gold Council.

Jonathan Rose is a recognized speaker for worldwide gold markets, including Hong Kong, Singapore, China, Europe and the USA.

HSBC was established in 1865 to finance the growing trade between China and Europe and is one the largest banks in the world.