From the following Shanghai Gold Exchange document:
"Detailed Rules of the Shanghai Gold Exchange on Benchmark Price Trading(Amended November 2019) "
"Article 17 The underlying of Shanghai Gold contracts shall be SGE-recognized gold ingots with a standard weight of 1 kg and a minimum fineness of 999.9; that of Shanghai Silver contracts shall be SGE-recognized silver ingots with a standard weight of 15 kg and a minimum fineness of 999.9. "
From Investopedia:"Throughout history, the ratio has remained fairly stable with increased volatility beginning in the 20th century....
The History of the Gold-Silver Ratio
Historically, the gold-silver ratio has only evidenced substantial fluctuation since just before the beginning of the 20th century. For hundreds of years prior to that time, the ratio, often set by governments for purposes of monetary stability, was fairly steady.
The Roman Empire officially set the ratio at 12:1.
The ratio reached 14.2:1 in Venice in 1305 and remained at this level up until1330 when it fell to 10:1.
In 1350 it fell to 9.4:1 in some places across Europe. It climbed back to 12:1 in the 1450s.1
The U.S. government fixed the ratio at 15:1 with the Coinage Act of 1792.2 "
China has chosen 1kg for its standard gold bars and 15kg for standard silver bars, which closely approximates the relative values ratio of the two metals from antiquity until the beginning in the 20th century.
Could it be that the SGE anticipates a future return to the 15:1 ratio, and they will then be trading approximately equal value units in gold and silver?
It looks to me like Shanghai will take over from London as the gold and silver price fixing centre in the near future.
- The SGE is currently inviting International financial institutions to apply to become Market Makers.
- The Chinese standard precious metal weights are metric, as is most of the world.
- The Chinese minimum purity standard for both gold and silver is 99.99%, higher than London and therefore most if not all Western gold and silver would have to be re-refined to match the Chinese products.
- The SGE is already the World's largest bullion market.
