Delivery on the first batch of gold contracts  trading  on  the  Shanghai  Futures  Exchange  (SHFE) will be completed  this  month,  with the price expected to reach around RMB 200 ($28.82) per gram, an analyst told Interfax today.

"The delivery  price  of SHFE June 2008 gold contracts will be finalized on June  16,  the  last  trading  day, but it is expected that the final price will have little impact on domestic and international gold markets as it currently  tracks  spot  gold  prices,"  analyst Wang Zhouyi, from  Shanghai  CIFCO  Futures,  told Interfax. The delivery process will take place from June 17 to June 23.

"Many long  position  holders may see losses, as the price for SHFE June 2008 gold contracts might stay around RMB 200 ($28.82) per gram, whereas on the first  day  of trading on Jan. 9, the price started above RMB 230 ($33.14)," Wang said.

"Domestic  gold  prices may fall below RMB 197 ($28.39) per gram in mid-June as  international  gold prices experience a downturn in response to the recovering  U.S.  economy," said analyst Ye Linfeng from CGS Ltd., a domestic gold trading platform and gold market information provider.

"Though gold prices in both domestic and international markets rebounded today, the  uptrend  will  be short-lived. Prices will drop again before the end  of  this  week  as  crude  oil prices continue to fall from the historical high and the U.S. dollar keeps rebounding," Ye predicted.

The SHFE started gold futures trading on Jan. 9, 2008, which saw trading of June 2008 gold contracts open at RMB 230.95 ($32.28) per gram.

SHFE June  2008 gold contracts reached a peak of RMB 233.59 ($33.66) per gram on  March 17, when international gold prices stayed above $1000 per ounce ($35.27 per gram).

December  2008  gold contracts are now the most traded contracts, ending at RMB 196.35  ($28.29)  per  gram  today. Front gold contracts on COMEX recorded  $883.4  per  ounce ($31.16 per gram) at 3:00 p.m. Beijing time today.

The open  interest  rate  of SHFE June 2008 gold contracts was 714 lots, with 1 lot  equaling 1000 grams, when trading ended at 3:00 p.m. Beijing time today.

As of today,  the  margin for June 2008 gold contracts will be raised to 30 percent, and from June 12 to June 16, the margin will be lifted to 40 percent.

In late  May,  China's  State Administration of Taxation (SAT) announced that investors  who conduct physical delivery of SHFE gold contracts are not required to pay value-added tax (VAT).