New | China central bank seen approving yuan-denominated ‘gold fix’ soon
The world’s top gold producer and one of the biggest consumers wants to be a price-setter for bullion...around 15 Chinese banks are expected to participate
China is expected to receive approval from its central bank for a yuan-denominated gold fix "anytime now", with more details about the scheme potentially set to emerge at a major industry conference this week, sources told Reuters.
The world’s top gold producer and one of the biggest consumers wants to be a price-setter for bullion and is asserting itself at a time when the global dollar-denominated benchmark, the century-old London fix, is under scrutiny for alleged price-manipulation.
If the yuan fix takes off, China could compel buyers in the mainland and foreign suppliers to pay the local price, making the London fix less relevant in the world’s biggest bullion market. However, given the yuan is not fully convertible, the two fixes could exist side by side globally.
The Shanghai Gold Exchange (SGE), on whose international platform the yuan-denominated fix will be launched, submitted details of the fixing process, and rules and regulations for participants, to the People’s Bank of China (PBOC) a few weeks ago, sources familiar with the matter said.
"They may approve it anytime now," said one of the sources directly involved in the process, who declined to be named because of rules on talking to media.
The SGE and PBOC did not reply to requests for comment.
The source, however, said more details would be announced at the LBMA Bullion Market Forum in Shanghai on Thursday if the PBOC approval comes through before the conference.