LONDON, June 16 -- Intercontinental Exchange (ICE) Tuesday announced here that the Bank of China has been approved by the ICE benchmark administration to participate in the gold auction which is used to determine the London Bullion Market Association (LBMA) gold price, a benchmark physical gold price in the world.

On the same day, the bank stated it was the first Chinese and Asian bank to directly participate at the gold price auction.

DIRECT PARTICIPATION

The London gold market has long been accepted as the global spot gold pricing centre. The LBMA gold price, which replaced the London gold fix established in 1919, is widely used in settlements between producers, consumers and financial institutions, and has been an important pricing benchmark for gold derivative contracts.

Since assuming administration of the gold auction, IBA has grown the number of direct participants and significantly increased auction volumes.

Finbarr Hutcheson, president of the ICE benchmark administration, said in a statement: "We are delighted to welcome Bank of China to the gold auction. The growth in daily volumes 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 price auction."

Average daily volumes for the morning and afternoon gold auctions have more than doubled, compared with the five months prior to the agency's administration, data showed.

Ruth Crowell, chief executive at LBMA, said: "I am delighted to see the growth in the number of direct participants to the LBMA gold price. 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."