Commodity Trade Mantra

Posts Tagged ‘London Bullion Market’

What if China, Russia Succeed in Going off the Dollar?

The Shanghai Cooperation Organization is an agreement between China & Russia, with an objective to settle international trades between them without using the dollar. If they succeed, the whole Asian continent, at some point in the future, will be off the dollar. I don’t think people fully appreciate what that means for the dollar.

We believe that a more transparent & reliable fixing could lead to higher gold prices as we suspect that prices are artificially low at this time and do not reflect the delicate supply demand balance in the physical gold market. Nor do they capture the degree of systemic & geopolitical risk in the world today.

Are The London Gold Vaults Running Empty?

The unprecedented demand for gold from China, in 2013, was being supplied to by the UK. So how much floating supply of physical gold is there left in London? Kenneth Hoffman states that the London gold vaults were virtually empty in December 2013. Are the last bars being moved out at this very moment?

The Gold Price Manipulation, London Gold Fix and the Quantum

If I were to criticize the Gold Fix I would certainly concede that its rather stupidly named. The Gold Fix is a real trading price & not a survey, like LIBOR & it is not a chart of quotes, like the Bloomberg spot gold ticker. Its a price at which a large number of buyers & sellers chose to deal & this makes it real.

Why The West Sells Gold And China Buys It

Western economies have created a finance industry dependent on fiat paper, have survived without using gold as money and therefore predisposed to dismiss gold as never being money again. So the West is less worried about losing physical gold than it should be & China is glad of the opportunity.

Readjusting the Time-Preference of Gold

Sooner or later a more realistic time-preference for gold is bound to return as leasing by central banks dries up. This explains why GOFO tried to go negative on several occasions in 2013. All that’s happening is time-preference is beginning to be rightfully re-instated.

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