The following is an edited release from the London-headquartered World Gold Council. For more information, please visit www.gold.org.
A year and half after it was established in September 2014, the Shanghai Gold Exchange (SGE) has launched the first yuan-denominated gold benchmark price. The launch ceremony was held at the Shanghai International Convention Center in April.
In attendance were: Pan Gongsheng, deputy governor of the People’s Bank of China; Zhao Wen, vice mayor of Shanghai Municipal Government; and more than 300 delegates, including the World Gold Council, the Silver Institute, and major domestic and foreign gold producers, as well as consumers and investment institutions.
Pan Gongsheng stated that launching the Shanghai Gold Benchmark Price was key in opening up China’s financial market to global economic integration.
Jiao Jinpu, SGE’s chairman, pointed out that launching the Shanghai Gold Benchmark Price is a milestone in internationalizing China’s gold market, adding that it is also an important step for SGE to become a world-leading precious metal exchange.
SGE is responsible for system development and operation maintenance of the Shanghai Gold Benchmark Price’s trading platform. This includes supervising and regulating trading to avoid any price manipulations and ensure fairness.
At the ceremony, SGE announced a list of 12 fixing members and six reference price members, along with 18 international consultants.
The first Shanghai Gold Benchmark Price was set at 256.92 yuan per gram.
“The launch of the Shanghai Gold Benchmark Price, offering a local reference price for gold in the local currency, represents another milestone, both in the impressive development of the exchange and in the internationalization of China’s gold industry,” World Gold Council CEO Aram Shishmanian said.
“It is a stepping stone to a new multi-axis trading market consisting of London, New York and Shanghai, and signals the continuing shift in demand from West to East,” Shishmanian said. “As the market expands to reflect the growing interest in gold by Chinese consumers, so too will China’s influence increase on the global gold market.”
Roland Wang, managing director of China for the World Gold Council, remarked that “China needs a gold benchmark that reflects local market flows and reduces gold’s price dependency on the U.S. dollar — so this is the ideal time for the Shanghai Gold Benchmark Price to launch. An Asian-focused, yuan-denominated benchmark will significantly increase the liquidity and efficiency of the gold price discovery mechanism.”
A great move to a valid pricing. Nothing like a little competition to set things straight Things have become more interesting…