Many foreign banks in China have been reportedly warned that their operations would be curbed if they refuse to participate in the yuan-denominated benchmark price for gold. To be launched in April, the Chinese benchmark for gold will be derived from a contract to be traded on the state-run Shanghai Gold Exchange (SGE). China is world's top producer and consumer of gold. Using that power, it wants to be the price-setter for bullion to influence global markets.

Obviously, China’s plan has the potential to dent the relevance of the US dollar-denominated London price, the reigning global standard, reports Reuters.