China on Tuesday launched a yuan-denominated gold price fix in its bid to become a price maker in a market dominated by London and New York. Listed on the Shanghai Gold Exchange, the benchmark price is derived from a 1 kg-contract and was set at 256.92 yuan ($39.70) a gram on Tuesday, Reuters reported. The price will be set twice a day. China is the world's largest gold producer and jostles with India for the tag of the biggest consumer of the precious metal globally.

Eighteen institutions including top Chinese banks such as Bank of China and ICBC, as well as Standard Chartered and ANZ will join the benchmark fixing. The yuan gold fix will come up against the London Bullion Market Association's spot benchmark set twice a day with 12 participants. Swiss trading house MKS' chairman Marwan Shakarchi said China's growing consumption of gold supports the set-up of the fix.

"To have a benchmark price in renminbi ... will help both consumers and producers in this part of the world," said Shakarchi. MKS is one of the 18 trading members of the yuan gold benchmark.