Price discovery will slowly move from the WEST to EAST..... physical gold price will soon follow Shanghai gold price benchmark with Comex losing it's power as physical gold stock diminish....
China to start gold swaps trading on Nov. 25
Nov 22 (Reuters) - China, set to overtake India this year as the world's top gold consumer, will start gold swaps trading on the interbank market next week, giving more hedging tools for banks dealing in bullion.
The Shanghai-based China Foreign Exchange Trade System will start gold swaps trading on November 25th, with the Shanghai Gold Exchange responsible for related settlement and delivery, the National Interbank Funding Center said in a statement on Friday.
The start of gold swaps trading comes as China is taking steps to open up its gold market and increase financial investments.
The Shanghai Futures Exchange launched simulated trading for gold and copper options on Tuesday. The central bank said in September it plans to raise the number of firms allowed to import and export gold and also ease restrictions on individual buyers of the precious metal.
Chinese gold purchases will top 1,000 tonnes in 2013 due to a surge in demand for gold jewellery, bars and coins, according to World Gold Council forecasts.
The amount is well ahead of India, bullion imports have fallen due to government restrictions aimed at supporting the currency and reducing a current account deficit.
I see Gold and Gold Mining Stock as a hedge against the collapse of USD and USD debt.
For several years, financial analysts, primarily those outside the mainstream of academia, have been warning that any day could be the black swan event that collapses the dollar, and ends U.S. hegemony as caretaker of the world's reserve currency. That day has finally arrived as on Nov. 18, a former head trader for a major financial institution issued a harbinger and stated that 23 countries, and 60% of the world's GDP, are right now setting up new swap lines which bypass the dollar, SWIFT, and the BIS, and will usher in a new global currency system which will kill the dollar.
The list of the 23 countries which are creating new swap lines outside of the dollar include China, Russia, India, and surprisingly, Germany, France, and the United Kingdom. This means that the Eurozone itself is abandoning the dollar, and preparing for transition to a new central banking system.
To facilitate the transfer of currencies and swap lines, there needs to be a bank of sufficient size and stature to aid in handling of this monumental task. One year ago, China, along with the BRICs nations of Brazil, Russia, India and South Africa, loaned money to a new financial institution they established and labeled the BRICs bank. This bank was created with the intention of bypassing the dollar, and allowing free trade to occur between nations without the need to trade for dollars first, as is currently the format under the petrodollar system. In fact, the new BRICs bank will function both as a bank of international settlement, as well as a lender of last resort, eliminating the need for the BIS and IMF, which currently reside under dollar dominion.
The only thing that stands in the way of the world's final rejection of the dollar is the wavering trust that Saudi Arabia and OPEC have with the U.S. in assuring oil transactions remain denominated in dollars under the 1970's Petrodollar agreement. But as the world has seen recently, even the Saudi kingdom is hedging towards a new global system, and has publicly stated that their ties to the U.S. are open for re-negotiation.
What started in September of last year, when an agreement between China and Russia ended the dollar's stranglehold over oil and how it was purchased, the past 14 months have seen a momentous rush towards setting up the infrastructure to replace the dollar completely in global transactions. And with 23 countries, including those from the BRICs nations and the Eurozone, preparing for new swap lines outside of dollar hegemony, the fuse has been lit on the dollar's death rattle, and the when has changed into the now.
IN CHINA, THE GOLD RUSH CONTINUES as Chinese people buy jewellery, coins and bars as a store of wealth to protect from inflation.
The world’s largest jewellery group, Chow Tai Fook Jewellery Group Ltd. , established in 1929, saw sales jumped 49% during the first half of 2013.
Gold in U.S. Dollars, 24 Hours – (Bloomberg)
It posted a first-half profit that beat analyst estimates as the drop in gold prices drove strong Chinese demand for gold. Net income almost doubled to HK$3.5 billion ($451.5 million) from a year earlier for the six months ended September 30, it said in a statement to Hong Kong’s stock exchange today.
Jewelers in China and throughout Asia are benefiting from continuing robust demand for gold.
==> This has led Chow Tai Fook and jewellery outlets having to buy gold bars and rebuild gold inventories. <===
Gold was trading near a one-week high today and is turning higher for the week, due to short-covering gains and the market questioning the Iran deal.
Comex had to suspend gold futures trading yesterday again - again for 20 seconds due to a massive sell order that led to just a $10 price fall.
Comex trading was halted for December gold futures at 6:02:24 a.m. GMT yesterday, Damon Leavell, a CME Group Inc. spokesman in New York, said in an e-mail. This led to gold falling to a 4 and a ½ month low near $1,225 an ounce before recovering from the massive sell order. Questions regarding gold manipulation continue to be asked including by Bloomberg (see link) overnight.
While the focus of the Bloomberg story is regarding possible rigging on the London AM Fix, regulators in the U.S. including the CFTC may need to reopen their investigation into manipulation of the gold market after the highly irregular trading on the COMEX last Wednesday and again early on Monday morning.
Without the massive sell order that shut down the COMEX for 20 seconds, gold prices would have been higher yesterday. That one trade pushed gold prices lower as European markets opened up and created very significant short term negative sentiment towards gold. It led to dozens of headlines that flew around the world which said that gold prices had fallen due to the Iran deal.