OREANDA-NEWS. November 18 2014. The Shanghai Gold Exchange International Board (“Gold International Board”) was officially opened in Shanghai Free Trade Zone (FTZ) on the evening of September 18. As one of the first A-class members, ICBC has successfully completed the first deal with other four Chinese and foreign institutions after the opening of the Gold International Board. A relevant head of ICBC said that the Bank will actively participate in market trading of the Gold International Board and take advantage of policies and location of Shanghai FTZ to vigorously develop businesses related to the FTZ and Gold International Board in the future.

Gold International Board is the first international financial assets trading platform launched in the Shanghai FTZ. It uses offshore RMB funds for transactions and RMB for valuation and settlement. Institutional investors registered in the Shanghai FTZ or overseas can participate in the trading through free trade (FT) accounts. In the initial stage, the Gold International Board will launch three RMB-denominated physical gold trading products and offer corresponding delivery and settlement systems. Compared to the current main board of the Shanghai Gold Exchange, the Gold International Board will attract more overseas investors, including banks and other financial institutions as well as upstream, medium and downstream enterprises in the gold industrial chain. The launch of the Gold International Board marks the “Shanghai gold” going global, which will not only strengthen China’s say in gold pricing, but also play a positive role in boosting the internationalization of RMB.

Relevant head of ICBC said that through its specialized operation of precious metals, ICBC has accumulated rich experience in the fields of physical precious metal operation, transaction, and financial services for the industrial chain, and owned the most established and complete business system among the domestic peers. The Bank has kept a share of more than 20% for years in trading volume in the Shanghai Gold Exchange and maintained the position as the largest clearing bank in floor trading. ICBC has also participated in design of the Gold International Board scheme, preparation of relevant businesses and system testing. In addition, it has actively built precious metal bonded warehouses in the Shanghai FTZ. On June 18, it signed an international center settlement bank agreement with the Shanghai Gold Exchange, becoming one of the first settlement banks of the Gold International Board. So far, more than one third of members of the Gold International Board have selected ICBC as the settlement bank.

Industry insiders said that China has already become the largest gold producer and consumer in the world. The huge domestic market and flourishing industrial chain have generated a huge demand for commodity trade and financial services. China is also becoming an important player influencing the world’s precious metal market. As participants of the Chinese gold market, commercial banks, especially the large commercial banks, will certainly play a proactive and essential role in promoting the development of gold market, RMB internationalization and global gold pricing.