Gold price benchmarking – let battle commence
By GCRU Gold News on Thursday, June 25 2015, 03:18 - Permalink
The question then becomes could a rival benchmarking system, but denominated in Chinese Yuan, eventually challenge the London system? It is thought what the Chinese are proposing would be more transparent than the LBMA Gold Price setting process, but the Yuan is still not a fully convertible currency, although China appears to be working to change this. Reuters suggests the two benchmarking systems could exist side by side, but if pricing starts to vary significantly between the two, and the Yuan gains more convertibility, this could begin to spend the end for a gold pricing mechanism set in the West, but where most of the physical gold traded happens in the East (and particularly in China itself). We did comment recently on this incongruity – See Gold: The US sets the price but Asia does the buying and it does appear that China is seeking more and more to impose its influence on global gold pricing and trade.