Well-known Chinese news site Sina recently reported that the Shanghai Gold Exchange is planning to use the Chinese currency RMB for its gold fixing price. The Exchange already submitted its plan details to the Chinese central bank for approval. Once approved, the Exchange will decide on the international and domestic banks that will be part of the process of fixing the prices. This is the latest of China’s efforts to improve its status in the world’s gold market. Currently the Base London Gold Fixing Price is the primary indicator of gold prices. However the London Fixing Price has been under legal investigation for potential manipulations. If the RMB-based Gold Fixing Price is established and accepted globally, the world gold trade could then be settled in RMB. This could render the London Gold Price irrelevant. However the Chinese currency is not yet freely exchangeable.
Source: Sina, June 24, 2015