Dubai Gold & Commodities Exchange to be the first foreign exchange to use Shanghai Gold benchmark
BEIJING (Scrap Register): Shangai Gold Exchange, in order to develop its derivatives products, will join forces with foreign exchanges and will allow them to use its yuan-denominated gold price. Dubai Gold & Commodities Exchange will sign the first deal Reuters reported.
In April, the world's biggest physical bullion exchange launched a yuan-denominated gold benchmark as China's effort to control the over pricing and its influence in the global market.
The move is an aggressive step by China, the world's top consumer, producer and importer of gold, to market its pricing mechanism and aims for a bigger say in an industry long dominated by London, where global spot prices are set.
The Shangai benchmark gold price is mainly based on well set rules and is transparent, traceable and auditable, backed by 12 price-setting institutions and six reference members. The exchange has also set up 61 designated warehouses across 35 cities in China to expedite deliveries and other services.