On Oct. 31 China's Shanghai Gold Exchange (SGE) signed an agreement with the Dubai Gold and Commodities Exchange to begin using their Yuan denominated price benchmark instead of the long-standing London and New York gold fix price.
In addition, this new agreement is just the first that the SGE is undertaking with commodity exchanges around the globe as the world's largest physical gold market begins to takeover pricing of metals in more markets.
SGE, world largest physical bullion exchange, says in other talks about similar cooperation
Shanghai Gold Exchange and Dubai Gold and Commodities Exchange signed an agreement on Friday in Shanghai which makes the DGCX the first foreign exchange to use the SGE's renminbi-denominated gold benchmark.
The SGE is in talks with other exchanges about similar cooperation, according to an SGE circular.
SGE is the world's largest physical bullion exchange. The renminbi-denominated gold benchmark, also known as Shanghai Gold was launched in April this year. It is one of China's efforts to earn more say over pricing of the precious metal and increase its influence in the global gold market.
China is among the world's largest producers, consumers and importers of gold, and it deserves pricing power that matches its position. It should have more say in an industry long dominated by London, which sets global spot prices, said analysts. - China Daily