Gold Trades Down to $1365 as China Approves First Gold ETF

The Chinese Exchange Traded Product will be very different from the SPDR Gold Trust in the U.S. although there is some confusion in the various English language reports on the asset underlying the ETF.
In the U.S. each share of GLD is backed by physical.

Dow Jones reported the "ETFs would trade on Shanghai Stock Exchange, buy Shanghai Gold Exchange futures"...

..."The Chinese gold ETFs would buy prompt-delivery gold futures contracts on the Shanghai Gold Exchange on behalf of investors, which would give them exposure to gold prices in the domestic market. This would be different from most U.S. and European ETFs, which buy bullion for each share sold and store the gold in vaults."...

When the idea was being mooted in January the usually reliable Caixen said: "Gold ETFs would be allowed to invest in the spot contract traded on the Shanghai Gold Exchange and up to 10 percent of other products, the official said."

The problem is, as Bloomberg says "Gold futures are traded on Shanghai Futures Exchange and spot and deferred delivery contracts traded on the Shanghai Gold Exchange."

So who knows what will be in the little buggers?
It matters because if the asset used is paper the effect will be more akin to that of the Reserve Bank of India's dematerialized gold which has had the effect of taking some of the investing pressure off of the physical market.

In the meantime gold is going lower. $1372.90 last, down $13.10. Today's low was $1,365.80. Here's the five-minute interval chart from FinViz: