China Launches Yuan-Denominated Gold Price at Shanghai Gold Exchange

On April 19, China officially validated the rumor and initiated a new Yuan denominated gold price at the Shanghai Gold Exchange (SGE). China is for the first time challenging Western powers in London and on the COMEX for influence in the gold market. As price discovery moves from West to East, many expect an upward revision to the gold and silver prices.

This is also coming on the heels of Deutsche Bank admitting to rigging the gold and silver price. As part of their settlement, it is rumored that they are going to rat out the other banks that also participated in the price manipulation. Lawsuits have already been launched, claiming billions of dollars in damages to investors of precious metals or mining stocks over the past six years.

These two events combined have the potential to remove or at least diminish the long-running gold price manipulation by the big banks. We certainly aren’t holding our breath quite yet, but the price action today was a good start with gold up 1.6% to close above $1,250 and silver up a massive 4.2% to close at $17.

SHANGHAI, April 19 (source) — China launched its yuan-denominated gold benchmark onTuesday in Shanghai as it seeks to secure more sway in the pricing of the precious metal.

The Shanghai Gold Benchmark Price (code: SHAU), is the quote for trading of 1kg, 99.99percent purity bullion, denominated in the Chinese yuan and derived from multiplerounds of trading.

The benchmark was set at 257.97 yuan per gram on Tuesday, the Shanghai Gold Exchange(SGE) said in a statement.

The benchmark also lays the foundation for shifting bullion trading in Shanghai frommostly spot to derivatives to increase the appeal of yuan-denominated bullion trading asfinancial instruments for both domestic and global investors.

SGE Chairman Jiao Jinpu said the launch of the benchmark offers the opportunity todevelop bullion trading in China’s financial markets and encourage more participation byglobal investors.

Standard Chartered Bank (China) Ltd. and ANZ Bank (China) Ltd. are among 12 fixingmembers for the benchmark trading. The other ten members are domestic banks.

The trading margin is set at 6 percent and transaction fees are exempted until June 30 this year.

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