LONDON—Bank of China Ltd. has become the first Chinese bank, and
the eighth direct participant, in the electronic auctions that set
the LBMA Gold Price benchmark, the London Bullion Market
Association said Monday.
It joins UBS AG, Goldman Sachs Group Inc., Bank of Nova Scotia,
Barclays Bank PLC, HSBC Holdings PLC, Societe Generale SA and
JPMorgan Chase & Co.
"Although being the world's largest gold producer and consumer,
China has never played a major role in the global gold fixing, said
Yu Sun, Bank of China's U.K. general manager. "Bank of China's
direct participation in the gold auction would reinforce the
connection between the Chinese domestic market and overseas
markets."
The LBMA launched the twice-daily electronic fixes on March 20,
with the Intercontinental Exchange Inc. as administrator, to make
the benchmark less vulnerable to manipulation. The old
telephone-based system was dropped after regulatory investigations
into benchmarks following the manipulation of the London interbank
offered rate, or Libor.
The LBMA's gold price is used by a broad range of firms, from
miners to jewelry makers, to settle gold trades worth billions of
dollars every day.
The intellectual property of the gold price is held by the LBMA
and the platform is operated by ICE.
Write to Ese Erheriene at ese.erheriene@wsj.com
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