SGE yuan benchmark unlikely to destabilise dollar but other exchanges may come under pressure.
by Prinesha Naidoo
Mine Web
China is set to extend its influence in the gold market with the launch of a highly anticipated yuan-denominated gold fix on April 19.
“As the largest producer and consumer of gold, it is only logical that they develop the infrastructure to trade, price and provide liquidity for gold in their own currency,” said John Butler, vice president and head of wealth services at GoldMoney.
Seamus Donoghue, chief executive officer of Singapore-based Allocated Bullion Solutions said the gold fix also provides the People’s Bank of China with the capability to control and stabilise the gold price.
Like the London Gold Fix, the Shanghai Gold Exchange’s (SGE) benchmark price will be set twice per business day and both local and foreign banks will be allowed to trade the contract.