LONDON—Bank of China Ltd. has become the first Chinese bank to
participate in the London gold price fix, the latest example of the
country's push deeper into global financial markets.
Bank of China, one of China's big-four state-owned lenders, will
participate in the twice-daily electronic auctions that set the
LBMA Gold Price benchmark, the London Bullion Market Association
said Tuesday.
It will join UBS AG, Goldman Sachs Group Inc., Bank of Nova
Scotia, Barclays Bank PLC, HSBC Holdings PLC, Socié té Gé né rale
SA and J.P. Morgan Chase & Co.
"Although... 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 move is the latest in a series of steps taken by China to
extend its reach in global financial markets, and will make it
easier for companies and individuals to invest abroad.
The Asian giant wants its currency, the yuan, to be declared an
official reserve currency, which would put it on a par with global
powerhouse currencies such as the dollar, the euro and the yen.
China is also playing a larger role in metals markets, although
its efforts have been tainted by a scandal at a warehouse in the
port city of Qingdao, in which banks allegedly pledged metal
multiple times as collateral on loans. Last year, China Merchants
Group Ltd. and China Construction Bank Corp. signed agreements with
the London Metal Exchange to explore ways of expanding in Asia, and
of spreading the use of the yuan.
The Bank of China's decision to join the LBMA Gold Price "adds
more kudos to the new mechanism," said David Govett, head of
precious metals at Marex Spectron.
Write to Ese Erheriene at ese.erheriene@wsj.com
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