The Shanghai Gold Exchange has set the price for 99.99 percent gold
Shanghai - AFP
China announced its first-ever "fix" for the gold price on Tuesday, as the world's biggest producer and consumer of the yellow metal seeks to establish its own benchmark.
The Shanghai Gold Exchange set the price for 99.99 percent gold at 256.92 yuan ($39.71) per gram, it said on its website.
It was marginally higher than the international price at the time, according to figures from goldprice.org.
"China needs a gold benchmark that reflects local market flows and reduces gold's price dependency on the US dollar," Roland Wang, managing director of industry group the World Gold Council in China, said in a statement.
"An Asian-focussed, yuan-denominated benchmark will significantly increase the liquidity and efficiency of the gold price," he said.
The industry group has put mainland China's demand for gold at 984.5 tonnes last year, with jewellery at 783.5 tonnes, and bars and coins at 201 tonnes.
Analysts said denominating the gold fix in China's own yuan currency is aimed at increasing international use of the unit.
"Having more sway in the gold market befits the long-term strategy of expanding the yuan's role as a global currency," Jiang Shu, chief analyst at Shandong Gold Financial Holdings Capital Management, told Bloomberg News.
China keeps a tight grip on inflows and outflows of the yuan, but says it is seeking to eventually make the currency fully convertible.
Head of the Shanghai Gold Exchange, Jiao Jinpu, said in December that launch of a yuan-dominated benchmark for gold would promote "internationalisation" of its business.
The exchange will also study yuan-dominated benchmark prices for other precious metals including silver, platinum and palladium, according to domestic media reports.