Luckily for Williams and others hoping to see China represented in the LBMA gold price, last week the Bank of China was added to the benchmarking process.Immediate reactions to the bank's addition ranged from positive to unsurprised. Speaking to Bloomberg, Afshin Nabavi, head of trading and physical sales at Switzerland's MKS, fell into the former camp, noting, "[t]o have China participate in the fix is a positive development both for the process and for China. It shows they are opening up to the world." Meanwhile, Ross Norman, CEO of Sharps Pixley, expressed a little less excitement, stating, "[China wants] to be on the top table in all areas of international trade and this is no different. They want to be represented in locations where benchmark prices are derived, and they have demonstrated that by signing up for the fix." Williams also seems skeptical about whether the Bank of China's addition to the LBMA gold price is really all that positive. In an article published this week he discusses the addition, noting that a second Chinese bank may also soon be added to the LBMA gold price, but comments, "[w]hether this on its own will do anything to allay the suspicions of the gold bulls remains to be seen, or whether it will make any difference to the pricing mechanism itself." That question is especially potent given that since the Bank of China's addition, two more western firms have been added to the LBMA gold price: Morgan Stanley (NYSE:MS) and Standard Chartered (LSE:STAN). It's also an interesting question given Thursday's news that China is looking to launch a yuan-denominated gold fix by the end of the year. According to Reuters, the Asian nation will do so via the Shanghai Gold Exchange, and expects to receive central bank approval in the near future.
Speaking at the LBMA Bullion Market Forum in Shanghai, Shen Gang, vice president of the exchange, confirmed, "[w]e will be introducing a renminbi-denominated fix at the right moment, we are hoping to introduce by the end of the year.We have policy support for development (of the gold market)."The news outlet points out what's likely on all investors' minds: a successful yuan-backed gold fix could "compel local buyers and foreign suppliers to pay the domestic yuan price, making the dollar-denominated London fix less relevant in the world's biggest bullion market." That said, it also notes that as the yuan isn't fully controvertible "the two fixes could exist side by side globally." Whether or not China's planned gold fix rises to dominate the market remains to be seen. However, one thing certainly seems clear from the events of the past week or so: China is interested in taking a more prominent place in the gold space and intends to do so from both the western and eastern ends of the market. Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. Related reading: What Investors Need to Know About the LBMA Gold Price China Now Involved in LBMA Gold Price, Planning Yuan-backed Gold Fix from Gold Investing News