SGE to start gold fix denominated in yuan this year

The Shanghai Gold Exchange will try to start offering the renminbi-denominated gold-fixing price this year, as an alternative to the dollar-denominated gold-fixing in London, a top bourse official said on Wednesday.

SGE head Xu Luode said that the bourse has been researching the pros and cons of the yuan-denominated gold-fixing price, and will strive to launch it by the end of this year as market conditions have laid "foundations" for the new price-fixing.

"The yuan-denominated price for gold will not compete with the current dollar-denominated price. Instead, it will be complementary, offer one more choice, and the yuan-denominated and US dollar-denominated systems can be cross-referenced," said Xu, adding that the yuan-denominated benchmark price will only make gold prices more reasonable. It will also reflect the existing supply and demand situation, as China accounts for about 40 percent of the global physical gold demand.