China, the world's top gold consumer, launched a yuan-denominated gold benchmark on Tuesday as it attempts to gain more control over its price and establish stronger influence on the international market.

The Chinese benchmark price, derived from a 1 kg contract traded by 18 participants on the Shanghai Gold Exchange, was set at 259.92 yuan ($39.71) per gram for the inaugural fix and 257.29 yuan ($39.76) per gram for PM fix, according to The Bullion Desk.

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"The market was very active today, participation was good - banks and other gold companies were all involved in the fix," a market participant said.

Of the 18 trading partners, 12 were fixing members, including top Chinese banks lsuch as Bank of China, ICBC, ANZ, Standard Chartered, Ping An Bank, and six other companies such as Shangdong Gold Group and China National Gold Group Corp. took part of the benchmark as reference price members.

"The Shanghai gold benchmark will provide a fair and tradable yuan-denominated gold fix price... will help improve yuan pricing mechanism and promote internationalization of the Chinese gold market," Pang Gongsheng, deputy governor of the People's Bank of China, said during the launching in Shanghai. 

Even if the country's gold fix will likely be bounded now in a closed monetary system, Swiss trading house MKS' chairman Marwan Shakarchi believes there is still potential for opportunities if the currency accomplishes full convertibility.

The benchmark price will be set two times a day based on a few minutes of trading per session. Meanwhile, the London benchmark, which is set in dollars per ounce, is also set in a twice a day auction through an electronic platform with 12 participants.

TagsChinese banks, Standard Chartered, ANZ, Ping An Bank, Bank of China, ICBC, people's bank of china, yuan, gold, benchmark, gold benchmark