By Chuin-Wei Yap 

BEIJING--The Shanghai Gold Exchange will launch its international board on Sep. 29 in the financial hub's new free-trade zone, a widely anticipated move to open China's tightly controlled gold market to foreign capital.

The board is China's bid to deepen its influence over the global gold market, where China is the biggest producer and consumer but sees itself as lacking clout in pricing.

"This is our window to the world," Shen Gang, the bourse's deputy chief executive, said at an industry conference on Thursday.

The first batch of 40 members in the Shanghai bourse's global pricing platform include Goldman Sachs Group, HSBC Bank PLC, Standard Chartered PLC and UBS AG, she said.

The yuan-denominated board will initially offer 11 contracts including physical gold contracts of 100 grams and one kilogram. The Shanghai exchange also plans to diversify into contracts for other precious metals such as silver and palladium in the future, Ms. Shen said.

The move comes at a time when gold prices have been languishing amid relatively low inflationary pressures world-wide. Gold prices have fallen 10% from their peak this year in March, as a stream of positive U.S. economic data bolstered dollar strength.

"Investors have been reluctant to run down their gold holdings as rapidly as they did in 2013," National Australia Bank analyst James Glenn said. Comex gold reached $1,248.5 an ounce on Thursday, up slightly from a three-month low last week.

China posted record consumption and production volumes for the precious metal last year, the first year where gold demand nationwide exceeded 1,000 metric tons, the China Gold Association said. That level of demand is expected to rise in coming years.

Traders expect the international board will broaden the global use of the yuan and help to simplify how gold is brought into the country, though it is not likely to drastically loosen state control over gold trade flows. China exercises strict control over the amount of gold that can be brought into the country, and the Shanghai Gold Exchange is a unit of the People's Bank of China, the country's central bank.

The free-trade zone is an 11-square-mile area touted as a test bed for the remaking of the country's financial sector. Locating the board in the free-trade zone distinguishes it as being aimed at offshore players.

"It'll help the gold price [in China] gain traction in global markets," Industrial Bank analyst Jiang Shu said.

The exchange is also setting up a warehouse in Shanghai's free-trade zone that can hold up to 1,000 tons of the yellow metal. It is hoping that regional countries, including those in Southeast Asia, will use the warehouse as a storage facility for gold trade flows.

Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com

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