20 Apr China launches yuan-dominated gold price fix
China launched a yuan-dominated gold price fix yesterday in an effort to become a global price allocator in the global bullion market.
The Shanghai Stock Exchange (SGE) launched the gold benchmark which is based on a 1 kilogram-contract set at 256.92 yuan (US$39.70).
China, the world’s top gold producer, consumer and importer admits its importance in the market should authorise the country to set the gold price.
According to the World Gold Council, the yuan price will be complimentary to the prices in London and future trading hub New York.
Pan Gongsheng, deputy governor of the People’s Bank of China said: “The Shanghai gold benchmark will provide a fair and tradable yuan-dominated gold fix price…will help improve (the) yuan pricing mechanism and promote internationalisation of the Chinese gold market.”
The participants in the gold-fixing process are comprised of four Chinese state-owned banks, ANZ, Standard Chartered, Swiss-based MKS, gold miners and jewellery traders.
China generated 450.05 tonnes of gold in 2015, Australia produced 285 tonnes and consumed 985.9 tonnes, while India consumed 849 tonnes.