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There appeared to be a changing tide of acceptance rather than concern over the past fortnight, that Shanghai is becoming a bigger, and more influential, cog in the global gold machine. One senior bullion banker said that fear is no longer the rationale, as has been the case for many, regarding China becoming the dominant force in the global gold marketplace. A gold dealer was of the same inclination. He said that “someone” needs to step in and help rejuvenate London’s importance as a global gold hub, be it the London Metal Exchange of Shanghai Gold Exchange; or both. “I think it should be the best [London as a global hub for gold trade] and still could be, but time is running out fast,” he said. The SGE recently launched its yuan-denominated gold benchmark pricing mechanism, the “Shanghai Gold Benchmark Price”. It is traded basis physical gold ingots with minimum fineness of 999.9 and a standard weight of 1 kg. The SGE performs centralized clearing, settlement and delivery for all executed orders, according to the exchange’s website. London has been one of the world’s major gold trading hubs for hundreds of years, home to the global benchmark now known as the London Bullion Market Association Gold Price. The system was previously known as the “fix” and was settled over the telephone by participating banks. The new LBMA Gold Price is operated and administrated by IntercontinentalExchange, with the LBMA owning the intellectual property. China, China, China China is the world’s number one physical consumer of gold, and for now producer, as such a local pricing system has been on the cards for some time. The LME is owned by parent-company, the HKEx, who recently signed an MoU with the SGE. Still, senior London players seemed unfazed by the new system SGE system: “It might be used by the local market, but until China opens up its currency markets, it will have no impact on the international market, nor London,” said one broker. Ross Norman, CEO of gold brokerage Sharps Pixley noted, “this is of course very much early days and it will almost certainly evolve to give transparency…and with transparency you get authentication and confidence that the benchmark is a valid number.” London calling, for change London is currently undergoing a period of reformation, steered by indust...