Bank of China formally announced its involvement and support by joining the gold auction which determines the London Bullion Market Association gold price, as the first Asian bank on Tuesday.

Industry insiders said that it further enhances the Chinese institutions' importance on global gold pricing and also demonstrates Bank of China's global markets trading and service capacity.

With long history, the London gold market has been accepted as the global spot gold pricing center. The LBMA gold price, which is accepted all over the world, is widely used in the settlement between producers, consumers and financial institutions，and is an important pricing benchmark for gold derivative contracts.

ICE Benchmark Administration Limited, the administrator for LBMA gold price, successfully launched a new, independently administered, transparent and electronic auction process in March, which replaced the London gold fix established in 1919.

"We are delighted to welcome Bank of China to the gold auction," said Finbarr Hutcheson, president of ICE Benchmark Administration.

"The growth in daily volumes of the gold auction coupled with the increase in participation from around the globe, demonstrates strong market support for the independent governance and oversight we have implemented to bring transparency and trust to the gold auction," Hutcheson said.

According to the Shanghai Gold Exchange, as the major participant in the domestic Chinese gold market, becoming a direct participant in the gold auction would allow Bank of China to be directly involved in the pricing process of the LBMA gold price, which could reflect the supply and demand of the Chinese market.

This will further reinforce that the Chinese gold market is stepping out into the global market and becoming more internationalized, which could improve the importance and contribution of China on the global gold market, insiders said.

"I am delighted to see the growth in the number of direct participants to the LBMA gold price auction process. In particular, I welcome the addition of Bank of China. As one of the LBMA's founding members, it is appropriate that they should be the first Chinese participant," Ruth Crowell, chief executive of LBMA said.

The LBMA is the pre-eminent body for the world's largest and most important market for gold and silver bullion.

Bank of China has participating in the gold trading business in London for over forty years. With experience obtained from the international market, it provides comprehensive gold products and service to clients in Chinese mainland.

Bank of China London branch was its first overseas branch. It joined the LBMA as an initial member in 1987, and had been the only Chinese bank with membership for the subsequent 20 years.