The Shanghai Gold Exchange (SGE) launched the world's first yuan-denominated gold benchmark on Tuesday, in an effort to strengthen China's pricing power in the global bullion market.
SGE announced the benchmark price, the Shanghai Gold Benchmark Price, at 256.92 yuan ($39.69) per gram, cnstock.com reported on Tuesday.
The term Shanghai Gold Benchmark Price is a yuan-denominated benchmark price. It was formed based on a centralized pricing process in which there are multiple rounds of trading. When the total buy and sell volumes reach a balance, the buy and sell orders are then matched and will be executed at the price.
SGE chose 18 banks and bullion traders, including China's four largest State-owned banks, as initial market makers for the yuan pricing process.
For nine consecutive years, SGE has been ranked as the world's largest spot gold transactions exchange on the floor.
SGE organizes the trading of gold, silver and other precious metals and provides services for members and investors, according to its website.
China, as the world's biggest gold producer and consumer, has long been looking for a greater say in the global gold market. The country's gold reserves have risen by 708.2 tons since April 2009.
