LINE

    Text:AAAPrint
    Economy

    Shanghai Gold Exchange set to reflect supply and demand relationship

    1
    2016-11-03 09:39China Daily Editor: Xu Shanshan ECNS App Download

    Shanghai Gold Exchange, China's first platform for trading gold, platinum, silver and other precious metals, was established in October 2002. Today, China is the biggest gold producing and importing country, as well as an important consumer of gold.

    The development of the Asian gold market accelerated at the beginning of the 21st century, and China's gold market grew rapidly with the fast and steady development of its economy, especially after the global financial crisis. Take the Shanghai Gold Exchange for example. Its transaction volume increased from 870 billion yuan in 2008 to 10.7 trillion yuan in 2015. And client scales increased from 400,000 individuals and 3,700 organizations to more than 8.6 million individuals and over 10,000 organizations.

    For a long time, London has been the center of the physical gold market and New York for the gold futures market. With the rapid growth in demand for gold in emerging countries such China and India, a new global pattern is gradually taking shape. But the gold pricing doesn't fully reflect the supply and demand relationship in the market in the East.

    The Shanghai Gold Exchange has been acting as a bridge for the Western and Eastern gold markets, reflecting China's price appeal for the global market. But to achieve sustainable and steady development, China's gold market should attract more foreign investors.

    The Shanghai Gold Exchange has been making efforts to establish a pricing mechanism, called "Shanghai gold", which would provide the global market a fair, tradable and reliable yuan-denominated gold benchmark.

    The benchmark price of "Shanghai gold" derived from a 1-kilogram contract for standard gold ingots with at least 99.99 percent purity, and the price will be quoted in the yuan per-gram and settled via the Shanghai Gold Exchange.

    The price of Shanghai gold is based on the transaction prices on the pricing transaction system following established transaction rules. The entire pricing process is open and transparent, guaranteeing the reasonability and fairness of pricing.

    To ensure the price sufficiently reflects the supply and demand relationship in the yuan-denominated gold market, the Shanghai Gold Exchange chose 12 pricing members and six reference pricing members, including commercial banks and gold-producing enterprises at home and abroad. The prices provided jointly by them would basically reflect the real supply and demand relationship of yuan-denominated gold.

    Till the end of September this year, more than 384 tons of gold was transacted based on the Shanghai gold yuan-denominated benchmark for 105.5 billion yuan. After about half a year's operation, the Shanghai gold benchmark is being gradually used by gold-producing enterprises as a trade settlement benchmark for gold hedging. And an increasing number of commercial banks are using the Shanghai gold benchmark as the basis for gold finance pricing such as gold lease and gold mortgage.

    The Shanghai gold benchmark has also been used as the anchor price for gold-related financial products by many financial organizations. Foreign markets, too, are working on financial derivative instruments that quote the Shanghai gold benchmark.

    The Shanghai Gold Exchange will establish a transmission mechanism to involve the international market. It has opened the domestic gold market to foreign investors through the international board and uses offshore yuan directly participating in transactions in the international board and the platform's main board, which will establish the initial connectivity of gold markets at home and abroad.

    The Shanghai Gold Exchange will deepen international cooperation to seek win-win development. It has explored trans-market cooperation with many overseas exchanges, including the Hong Kong exchange, Chicago Mercantile Exchange, Dubai Multi-Commodities Center and the Bursa Malaysia Derivatives Exchange, which would enable foreign investors to directly trade in yuan-denominated gold products through local transaction platforms.

    A series of contract prices, including the Shanghai gold benchmark, has improved the supply and demand relationship in the international market, enhanced its international influence and increased the efficiency of price transmission. And these moves will help China gain metal pricing power and increase its influence in global gold market.

    By JIAO JINPU

    The author is chairman of Shanghai Gold Exchange.

      

    Related news

    MorePhoto

    Most popular in 24h

    MoreTop news

    MoreVideo

    News
    Politics
    Business
    Society
    Culture
    Military
    Sci-tech
    Entertainment
    Sports
    Odd
    Features
    Biz
    Economy
    Travel
    Travel News
    Travel Types
    Events
    Food
    Hotel
    Bar & Club
    Architecture
    Gallery
    Photo
    CNS Photo
    Video
    Video
    Learning Chinese
    Learn About China
    Social Chinese
    Business Chinese
    Buzz Words
    Bilingual
    Resources
    ECNS Wire
    Special Coverage
    Infographics
    Voices
    LINE
    Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
    Copyright ©1999-2018 Chinanews.com. All rights reserved.
    Reproduction in whole or in part without permission is prohibited.
    主站蜘蛛池模板: 孝昌县| 子洲县| 呼玛县| 古浪县| 科技| 高要市| 张家港市| 平顺县| 宁阳县| 夏河县| 城市| 吴江市| 黄梅县| 津市市| 靖远县| 宁夏| 江华| 喀什市| 山阴县| 南投县| 宁波市| 西青区| 错那县| 临湘市| 宁都县| 大连市| 瑞金市| 都安| 竹山县| 辛集市| 衡山县| 教育| 孝感市| 大荔县| 洛宁县| 岳普湖县| 新余市| 鹤山市| 会东县| 酒泉市| 古浪县|