China Pushing Foreign Banks to Participate in Gold Benchmark

Reuters reported that China has warned foreign banks that it may curb their operations if they don’t participate in the launch of a yuan-denominated benchmark gold price.
As quoted in the market news:

The world’s top producer and consumer of gold has been pushing to be a price-setter for bullion as part of a broader drive to boost its influence on global markets.
Derived from a contract to be traded on the state-run Shanghai Gold Exchange, the Chinese benchmark is set to launch in April, potentially denting the relevance of the current global standard, the U.S. dollar-denominated London price.
China needs the support of foreign banks, especially those who import gold into the mainland, but they could be wary given the global scrutiny on benchmarks following the manipulation of Libor rates in the foreign exchange market.
Banks with import licenses will face “some action” if they do not participate in the benchmark, said a source who did not want to be named as he was not authorized to speak to media.

Click here to read the full Reuters report.