Yuan-denominated gold contract is launched by the world’s top gold consumer China on Tuesday (April 19), as the country took an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market.
The benchmark is a culmination of efforts by China over the last few years to reform its domestic gold market in a bid to have a bigger say in the bullion industry, long dominated by London where the global spot benchmark price is currently set.
As the world’s top producer, importer and consumer of gold, China has balked at having to depend on a dollar price in international transactions, and believes its market weight should entitle it to set the price of gold.
The new benchmark may not be an immediate threat to London, but industry players say over time China could set the price of the metal, especially if the yuan become fully convertible. Read More