This page has been archived and commenting is disabled.
China To Establish Yuan-Denominated Gold Fix In Bid To Upend London Benchmark
A long time ago, in a financial galaxy far, far away, a “fringe” blog raised the topic of gold market manipulation during the London AM fix. Several years later (which, incidentally, is about average in terms of the lag time between when something is actually going on and when the mainstream financial media finally figures it out and reports on it), it was revealed that in fact, shenanigans were likely afoot and indeed, regulators are still trying to sort out what happened.
Via WSJ earlier this year:
The precious-metals probes are the latest example of regulatory scrutiny into how the world’s biggest financial institutions influence widely used benchmarks. Until last year, prices for gold, silver, platinum and palladium were set using a decades-old practice of once- or twice-a-day conference calls between a small group of banks. The process for setting each of the price “fixes” has since been overhauled...
Last year, the FCA fined Barclays £26 million ($40.2 million) for lax controls after one of its traders allegedly manipulated the gold fix at the expense of a client…
Swiss regulator Finma settled last year allegations of foreign-currency manipulation with UBS. The regulator said it found “serious misconduct” among precious-metals traders at UBS, including “front running,” or trading ahead of, the silver-fix orders of one client…
More than 25 lawsuits have been filed against Barclays, Deutsche, HSBC, Bank of Nova Scotia and Société Générale over their alleged role in setting the gold fix.
The ‘fix’ for the ‘fixed’ gold fix (only in the world of corrupt high finance is such a hilariously absurd passage possible) is supposedly a new system whereby the fixings are derived electronically, but as Reuters notes, there’s a new kid on the block when it comes to benchmarking the price of gold. Here’s more:
China conducted trial runs for the planned launch of a yuan-denominated gold fix last month, three sources familiar with the matter said, in a sign the world's second-biggest bullion consumer was moving closer to creating a benchmark price.
The state-run Shanghai Gold Exchange (SGE), on whose international platform the fix will be launched, conducted the trial with major Chinese banks and a few foreign banks, the sources said this week…
China plans to launch a yuan gold fix this year through trading of a 1 kg contract on the SGE, Reuters reported in February.
"The launch of the fix is towards the end of the year ... Banks were invited in April to test the fixing process," said one of the sources directly involved in the process.
The SGE will act as the central counterparty, unlike the London fix where the bullion banks settle trades amongst themselves, the source said.
If the Chinese fix becomes a success, it could add to the pressure on the London benchmark, which is used worldwide by producers, refiners and central banks to price holdings and contracts, although the two could exist side-by-side.
The ironic conclusion: the currency 'manipulating', GDP fabricating, soon-to-be global superpower is now set to challenge the century-old gold price fixing regime which is under fire for being just as corrupt as every other 'benchmark' has proven to be since we first suggested that LIBOR was rigged some six years ago. But don't worry: China promises that yuan hegemony is not something Beijing is interested in establishing.
»
- 41142 reads
- Printer-friendly version
- Send to friend
- advertisements -
Revenge for the West's gunboat diplomacy of yesteryear? Three thousand year old cultures have long memories.
revenge is best served chilled
Thank god I got gold fillings and a pretty grill
in other news
Alex Jones interviews Michael Savage
Savage on Garland Shooting: There’s a Link Between White House and ISISIf true, this could be a BIG deal.... IF true.
China wants the US to be stable too not just China
basically every political elite in China moved their millions to the west...
they didn't do that just to try destroy their own retirement homes
Sorta true, but on what time scale they want USA stable?
I suspect we are talking about decades if not a century. So this also mean if the US elites doesn't behave, they will be punished by Chinese elite.
By the way the shitshow which will come to city near you at full power can't and won't be stopped by the Chinese, because this is what the Western/US elites bought at themselves. Only thing the Chinese and Russians can do, is managing that process.
Guess how?
Ruling empires control "Weights and Measures" ...two countries still use the English system, Liberia and ...
I heard China re-cast all their Gold into Kilo bars, metric base 10, What do you think of: $100 gram Gold, $10 gram Silver... More in line with production ratio and base 10, like all the rest of the Metric System.
Of course, the USD will be deprecated and the ratio will be denominated in a different currency...
Just a thought...
Yeah the Patriotism is Killing Me! Steal money , flood Canada, UK, drive up property prices.
OR another way to put it; How to gain enemies and influence people.
the chinese will move their equity back home in a heartbeat when chinas credit bubble bursts
they want a stable europe - end destination of the silk road. If i were them id be happy for america to stay in chaos, because with the american leaderships policy of sour grapes : orchestrated chaos , america would see all europe burn before it let russia and/or china surpass them
Gold fillings you say?
-check
You know, when the shit hits the fan, everyone needs to contribute.
We'll replace your teeth with some iTeeth that keeps track of your dental health and alarms you when its time to brush them.
Yee Ling, eat all your dinner there are starving children all over America
revenge is best served on gold-plated tungsten
I believe the correct quote is,"revenge is a dish best served gold."
Don't worry, we have Fort Knox....
"The House of Illusion"
Wait, I thought it was a useless relic......
It's not useless, they use it to calculate haircuts or something.
They call it a barbarous relic anyways...
The securest dust in history.
And tungsten is useless now that everyone uses fluorescents or LED's nowadays.
Hey...is that why they phased out incandescents? So they could send the tungsten to China?!
Tungsten is a massively important strategic element. Light bulbs are a small component of its usage.
Yes. Jobs will be created sweeping the dust off the floors.
golden rule redux
My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.jobs-review.com
I know China has its own timeline. But it's about time.
Oh man do they have Nail Guns in China... somebody is playing 3,000 year old chess against a population playing packman reruns
There are no mistakes. All by design.
"A long time ago, in a financial galaxy far, far away, a “fringe” blog raised the topic of gold market manipulation during the London AM fix. Several years later (which, incidentally, is about average in terms of the lag time between when something is actually going on and when the mainstream financial media finally figures it out and reports on it), it was revealed that in fact, shenanigans were likely afoot and indeed, regulators are still trying to sort out what happened."
Now THAT is an opening paragraph. Do more of that kind of writing. Snark is great, but creative snark is better. If every article starts out sounding like a bitch-fest of defeatism that's what the whole thing turns into. That slight difference in tone is welcome.
I don't know about others, but I, for one, am running a bit low on righteous indignation and outrage. We all know everything is corrupt and we're all going to hell, just a matter of how quickly. So along the way to hell a little humor and humanity from time to time is like a breath of fresh air. Not all the time, mind you. But just enough to throw a little curve ball every now and then. Keep things off-balance.
so you want more English majors writing for ZH? got it
how about a woman's touch?
Sure, why not? Got no problem with that. Hell, I'm an economist and I've been known to turn a decent phrase around here from time to time. Writing what you know with a little humor and humanity thrown in isn't that difficult, it just takes some balls to do it.
Anyone can write from the 3rd person in dry, satirical language. Putting a little of yourself (good, bad, ugly, hysterical, etc.) into your writing and you're taking a bit of a risk. But if it works, it's so much better.
ZH has been running on what I'd call "formulaic writing" for years now. They have their recipe on how to write a ZH article and they stick to it. And it's become tedious. I think some of the replies are better than the original article in many cases. Why? Because there is HUMAN CONNECTION to them. A phrase or an observation that instantly connects with the person reading it. Better yet, if they DON'T know that phrase but they see others do, they want to look it up so they can understand it and participate.
Example: start quoting lines from the movie 'Aliens' around here and everyone WANTS to be in on it. "Nuke it from orbit, it's the only way to be sure." "That's it man, game over, game over!" "They mostly come out at night. Mostly."
You know every one of those phrases. And if you don't and see others who do, you want to look them up so you can be part of the discussion. To hell with pre-digesting everything for the reader and taking it to the lowest common denominator. Write it like you've lived it and they'll want to be a part of it.
True dat.
If this turns out to be real... "You'd better buckle up, Dorothy. Cause Kansas is going bye-bye"
The yellow brick road is already gone.
Water? You mean like, From the toilet?
can't believe that's 16 years old now
"can't believe that's 16 years old now"
"can't believe that it took 16 years to see the obvious" (FIFY)
Matrix – Limited Hangout
(the afterlife on film)
"Hell, I'm an economist....."
I´m sorry. I´m so very sorry. ; )
Your right of course. Having a bit of wit in your writing style keeps the eyeballs coming back.
settle down and go make me a sandwich
like I tell my wife: beer me !
"Now THAT is an opening paragraph. Do more of that kind of writing. Snark is great, but creative snark is better. If every article starts out sounding like a bitch-fest of defeatism that's what the whole thing turns into. That slight difference in tone is welcome.
I don't know about others, but I, for one, am running a bit low on righteous indignation and outrage. We all know everything is corrupt and we're all going to hell, just a matter of how quickly. So along the way to hell a little humor and humanity from time to time is like a breath of fresh air. Not all the time, mind you. But just enough to throw a little curve ball every now and then. Keep things off-balance."
Well done, and agreed, ND - I'm a huge fan of well-turned phrases.
Ahh, and would that every comment posted on ZH be as succinct and intelligible as yours, NoDebt. (I loved that opening paragraph too.)
say bye bye to the old boss, and hello to the new boss.
You're gonna realize just how much you miss that old boss when this new boss takes over.
The new boss is no boss.
Things are heading for de-centralized, flat, platform based organizations.
"The SGE will act as the central counterparty, unlike the London fix where the bullion banks settle trades amongst themselves, the source said"
Sounds pretty centralized to me....
Gold. Down.
So far, US sanctions on Russia, Saudi oil price warfare and PM manipulation have helped one country far more than anyone else: CHINA.
I'm sure it's just another of many coincidences.
I logged in to upvote you. This is a great point to keep in mind. As much as it may seem to benefit the establishment to suppress price discovery in a number of markets, the Chinese sure do not have a problem with buying gold at $1200 vs $1900 or oil at 'half price'. And buy they are.
I'm still convinced the whole thing would make sense to the fly on the wall in the right rooms of power.
And I'm convinced if the fly on the wall provided transcripts, people in high office of several different countries could all be convicted of treason. Their plans may make sense for their goals, but not be in the best interest of the people they're sworn to represent.
all these major developments have been to chinas advantage - but
its not neccessarily china's exclusive priviledge - i think that when you are the biggest exporter/biggest capital generating nation on the planet, most developments will seem to be to your advantage
The shy knees are totally owning Western banksterism and exploiting their corruption and short term thinking weaknesses to the max. China doesn't have to be anywhere near perfect to replace all of them because the bar has been set so low.
It all means nothing unless we know how much physical gold these countries have. The real numbers will certainly never be known to us...
I imagine the .gov knows what the score is and tells China and Russia how much gold the can buy each day. The U.S. can't stop what's happening, so they need to coordinate with large gold buyers of phys to keep their game going. The buyers follow the rules so that they can continue to accumulate. Everyone knows the West is dead. Some time soon the dominoes will start to fall. I bet there are treaties already written up waiting for the moment.
why so much chatter about the barbourus relic?
A word of caution to China: Beware of another culture with very old memories. I'm talking about the Zi'Borg.
They are relentless in their pursuit to Infiltrate and Assimilate any attractive species into their Collective. Their mantra is: "Resistance Is Futile. Argument Is Irrelevant. Prepare To Be Assimilated."
"A long time ago, in a financial galaxy far, far away, a “fringe” blog raised the topic of gold market manipulation during the London AM fix."
You mean GATA and it's contributers and supporters of course? No?
If there is one thing ZH does exceptionally well, touting itself just might be it.
This is actually very cool if we can also trade cny..........................
Exactly. Until then it's all huffing and puffing.
The MSM lives a few years in the past. Funny that.
If the Council for Foreign relations has decreed China is our next "enemy" that we must ring fence and checkmate thru TPP you can be sure that the Yuan will gear up to rival the IMF/FED's financial petrodollar based storm.
Pretty soon Belgium will be the only country not on our enemy list....
I'd be ok with using drone strikes on them.
If China is into gold so heavily, the rest of the world should get out of gold, just to screw them over. Heh heh.
So, what is likely the world's largest consumer of gold will now set the price? Gee, they have no motivaiton to allow it to rise, either.
So, fucked coming and going.