A year and half after its birth in September 2014, Shanghai Gold Exchange (SGE) introduced the first yuan-denominated gold benchmark price in the world, signaling a new wave of business innovation. The launching ceremony of Shanghai Gold Benchmark was held by SGE at Shanghai International Convention Center on April 19, 2016. Pan Gongsheng, Deputy Governor of the People’s Bank of China, Zhao Wen, Vice Mayor of Shanghai Municipal Government and over 300 delegates from World Gold Council, The Silver Institute, World Platinum Investment Council, major domestic and foreign gold producers as well as consumers and gold investment institutions attended the ceremony and witnessed the launching of the Shanghai Gold Benchmark Price.

With continuous opening-up of the gold market in China, Asia Pacific has become an important gold production and consumption region in the world. Global investors’ demand of trading and risk management with yuan-denominated gold product has increased steadily. Following the trend of domestic and international gold market development, SGE leverage its own advantage, researched and introduced the gold price discovery mechanism with product traded and cleared in RMB to the market. Shanghai Gold Benchmark Price Trading refers to the product traded via SGE trading platform, the underlying is 1 kg gold ingots with a fineness of no lower than 999.9. The quotation unit is yuan/gram. The trading runs with multiple auction rounds that participants submit the buying or selling volume based on the price. When buying and selling volume reach a relative balance, the Shanghai Gold Benchmark Price is set. SGE is responsible for the system development and operation maintenance of Shanghai Gold Benchmark Price Trading platform. SGE is also in charge of the supervision and regulation of the trading process to avoid any price manipulation to ensure fairness of the price.

During the ceremony, Deputy Governor of the People’s Bank of China, Pan Gongsheng stated that the launch of Shanghai Gold Benchmark Price is a key initiative of innovation and opening-up of China’s financial market leaning in the global economic integration. In addition, this is a necessary requirement for China to be complied with the in-depth transformation and the continuing shift of demand from West to East in the global gold market. Shanghai Gold Benchmark Price will provide a fair and tradable yuan-denominated benchmark price to global investors. It will also provide market participants with a new product and a well-designed tool of risk management, which will improve the price discovery mechanism, and further accelerate the internationalization of China’s gold market.

Vice Mayor Zhao Wen extended the congratulations on behalf of Shanghai Municipal Government to the successful launch of Shanghai Gold Benchmark Price and a full recognition to SGE’s contribution to the construction of Shanghai International Financial Center. She said that it is essential that all kinds of market participants including those in financial market shall explore proactively and be innovative so as to keep Shanghai as a pacesetter in the process of the reform and opening up, as well as the pioneer of innovation and development. The Shanghai Gold Benchmark Price is a significant innovation by SGE after the launch of the International Broad. It is also the example of Shanghai’s proactive attitude towards the system and mechanism innovation. Shanghai will continue to be oriented to marketization, internationalization and legislation, seeking to provide a sound investment environment, to improve laws and regulations, and to build up a much globalized financial system. The government supports SGE to become another axis of gold trading market following London and New York.

Jiao Jinpu, chairman of Shanghai Gold Exchange pointed out that, the launch of the Shanghai Gold Benchmark Price is another milestone of the internationalization of China’s gold market. It is also an important step for SGE to become a world leading precious metal exchange. Seizing the opportunity of successful launching of Shanghai Gold Benchmark Price, SGE is devoted to serving the real economy, leading and regulating the development of China’s gold derivative market. It will also facilitate the formation of a multilayer and more open-up gold market system in China by three transformations of SGE which are, the transformation from physical trading to both physical and derivative trading, the transformation from pure commodityproperty oriented to physical and financial properties, and the transformation from domestic market oriented to both domestic and international market oriented.

 Mr Aram Shishmanian, CEO of World Gold Council

 Ms ZHAO Fanghua, General Manager of Trading Department of Shanghai Gold Exchange

On the ceremony, SGE announced the list of 12 Fixing Members and 6 Reference Price Members, along with 18 international consultants. The first Shanghai Gold Benchmark Price set at 256.92 RMB/g.