Gold Bullion Allowed As Collateral in China

GoldCore's picture

China’s Shanghai Gold Exchange said it will allow physical gold to be used as collateral on futures contracts from September 29, according to a statement posted on its website this morning as reported by Reuters.

Physical gold will be permitted to be used for up to 80 percent of margin value, according to the statement.

Reuters then corrected the story and the second refiled story was changed and given a different focus:

The Shanghai Gold Exchange said on Thursday it will allow A-shares, exchange-traded funds and treasuries to be used as collateral for gold trading.

The Shanghai Gold Exchange said on Thursday it will allow A-shares, exchange-traded funds and treasuries to be used as collateral for gold trading.  The move comes as Beijing unleashes a slew of measures to stave off a collapse in its stock market and restricts trading in stock index futures. 

With counterparty and sovereign risk remaining high although unappreciated, gold is no longer being seen simply as a commodity – particularly in China, India and Asia. Rather, it is increasingly viewed by more astute market participants as an important asset and a currency with no counterparty risk.

Gradually, we are seeing the re-monetization of physical gold as it is being reincorporated into the modern financial and monetary system. Keynes’s ‘barbaric relic’ is becoming less barbaric by the day.

The development is an important one for the gold market and is bullish for the “pet rock.” It shows, once again, that gold is slowly but surely becoming a cash equivalent and as money again.

Gold’s re-monetisation in the international financial and monetary system continues.

Read the Reuters articles here (original) and here (updated).

Read more on the GoldCore blog

DAILY PRICES
Today’s Gold Prices: USD 1107.75, EUR 989.73 and GBP 720.32 per ounce.
Yesterday’s Gold Prices: USD 1122.30, EUR 1002.50 and GBP 730.38 per ounce.
(LBMA AM)

Gold fell 1.4% yesterday, the biggest loss in two months, to test support at $1,100 per ounce. It slid to $1,101.11, its lowest since August 11. Silver fell 1.1% and gave up some of its recent gains.

IMPORTANT NEWS

Gold at 4-week low as stocks rally, dollar rises – Reuters
Gold futures log lowest settlement in a month – MarketWatch
India’s Modi Moves Closer to Tapping Gold Hoard to Cut Imports – Bloomberg
Gold futures slightly lower, on track for a fifth straight losing session – MarketWatch
Gold ring found during roadworks in Ireland declared 12th century treasure – Independent.ie

IMPORTANT COMMENTARY

 Something Just Snapped At The Comex (Updated) – Zero Hedge
Silver Bullion -NEW 100 oz poured silver bars to be available from Asahi – COINWeek
South African Gold on the Brink With Half of Mines Losing Money – Bloomberg
India’s gold monetization schemes met with skepticism – MINING.com
Druckenmiller, Soros, Icahn, Faber Like Commodities and Precious Metals – GoldSeek.com

Read more News and Commentary on GoldCore.com

 

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Evan Wilson's picture

I wonder how long it will be before "And it's gone"?

 

I wouldn't trust any of them to hold the physical gold. I can easily see them selling it off and only allowing you to trade the holding certificate, which will become worthless once everyone realizes "It's gone".

 

https://www.youtube.com/watch?v=-DT7bX-B1Mg

 

 

fancyfree's picture

All countries are re-monetizing physical gold.  In 2014 the Board of Governors of the Bretton Woods institutions agreed to issue gold certificates on an interim basis until their monetary gold reserves held by the Global Debt Facility could be minted into national currencies.  https://s3.amazonaws.com/khudes/breakthrough.pdf    There have been two pressreleases on the global currency reset: http://presswire.com/pr/hudes_250714.html and http://presswire.com/pr/hudes_90315.html   Here are links to the rest of the documentation in the global currency reset to replace fractional reserve fiat currencies with national currencies minted from gold https://s3.amazonaws.com/khudes/Twitter.25.15.1.pdf  and local currencies http://www.activistpost.com/2015/09/central-banks-nervous-as-alternative-currency-with-david-bowies-face-goes-viral.html?utm_content=bufferff73b&utm_meium+social&utm_source=twitter.com&utm_campaign=buffer

 

kuro_neko's picture

so ZH'ers, you now know why Gold needs to go down a lot more

Its used as collateral for Chinese bad loans, and when these loans default, collateral needs to be sold, at ever lower prices...

There will be no relief until all those loans are cleaned up and Gold will touch 700$ ... be prepared.

kumquatsunite's picture

He-double hockey sticks. If you are watching the price of foods, gold is completely and totally irrelevant. Even here at the end of summer, when veggies should be ultra cheap, they are not.

Why? Because the damned farmers are using US resources, especially water, to grow stuff and then send it to China. The US needs to tell American farmers you use our water, our land, we have first dibs to our own Food. In Washington State, they've sold the state to the Chinese for buying a few apples. Meanwhile, my son, who loves apples, has to pay a BUCK and A HALF for ONE APPLE. That is sue worthy.

Time for export controls and Keeping food for our own. Besides China doesn't have any fresh water, so if you think you should eat anything from their you are crazy. Mexico too or did you miss the recent salmonella disruptions associated with Mexican lettuce and cucumbers. Apparently the Mexicans go poo in the fields. Not good.

cynicalskeptic's picture

US Water AND oil - diesel to run the ttractors and combines and oil to produce the fertilizer and pesticides.....  AND the US GOV subsidizes farmers and exports so htat the rest of the world gets 'cheap' food from the US while bankrupting their own farmers.

You have to wonder what the REAL cost is to the US for these exports... the Olgalalla Aquifer will need centuries to refill - centuries of NO pumping and refilling... you think that is going to happen?  ANd even if oil is temporarily cheaper, think of the cost of all the oil used for US agriculture (for imported oil or fracked production here in the US adding other uncounted costs).

zaphire999's picture

The price of gold will drop before it rises again.

It's a long term store of wealth, not a short form of trading.  Besides, the gold price will spike quickly once another crash hits.  And they always hit, over, and over, and over, and over ...

divingengineer's picture

Awww Geeee....

They'll let you put your bullion up for collateral in their vaults for fractional reserve, unicorn fart, fiat loans at a usurious rate of interest?

That's mighty white of em. 

Dragon HAwk's picture

If Gold is so worthless why does every  idiot main stream media quote it's price every day.. can't wait till they start reporting it as Physical Gold price today is.. and leave the paper people Rot..

ali-ali-al-qomfri's picture

will they take photographs, canoeing records and Long/Lat info for any margin?

Rock On Roger's picture

Ha

You must have a waterproof GPS?

 

Stack On

arbwhore's picture

Nothing is bullish for gold. Its not allowed.

atoast2toast's picture

is that nazi gold train in poland bullish for gold ?

bardot63's picture

It's very bullish for Poland......

atoast2toast's picture

is that nazi gold train in poland bullish for gold ?

bardot63's picture

It's also vey bullish for JP Morgan, which will find a way to steal it...........

arbwhore's picture

Funny how everyone wants such a barbarous relic.

undertow1141's picture

Its only fools and paper holders that talk down physical metal. So break it down to ignorance and jealousy. :)

alphahammer's picture
alphahammer (not verified) undertow1141 Sep 10, 2015 7:47 PM

Who sets the price of gold? Ultiamtely ... all the way down the line... As I understand it -- its a human being. God him/herself does not shout down from the heavens "gold will be $1,000 per ounce henceforth" So what is the price of gold? Its a psychological construct. Speaking of which, so is fiat, so is real estate, so is unicorn farts...

Its all a product of the mind of man. There is massive and no actual value in any of it. There is no way to place an actual value on any of it. 

Rock On Roger's picture

The gods bred humans as slaves to mine the gold.

And we're still digging and stacking.

 

It's for the gods, the gold.

Troy Ounce's picture

 

 

Those poor aliens will be scratching their heads again

KnuckleDragger-X's picture

I wonder if they're keeping it in their magic bonded warehouses?

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) Sep 10, 2015 9:01 AM

Central bankers want to kill people and start bloody wars.

Squid-puppets a-go-go's picture

im confused. Like, china uses piles of iron ore as collateral for mass leverage. Is this article saying they werent already doing that with gold?

NoBillsOfCredit's picture

Keynes did not call gold a barbaric relic. He called the gold standard that. Any case, he was wrong.

RaceToTheBottom's picture

What was portrayed as Keynesianism was basically how to get free money.  It was half the picture.  

That way they can steal from future generations, rather than have the cost of the free money become evident to the people/businesses that benefited from it...

Fahque Imuhnutjahb's picture

"The best way to destroy the capitalist system is to debauch the currency.

By a continuing process of inflation governments can confiscate,

secretly and unobserved, an important part of the wealth of their citizens."   ---- JMK.

 

I reckon Keynes had a pretty good grasp of what the ongoing game plan would be.

undertow1141's picture

Physical Gold & Silver

Paper metal & Stocks

Creepy A. Cracker's picture

"is bullish for gold."

How many times will I allow the football to be pulled away as I'm about to kick it? (reference Lucy and Charlie Brown)  This is getting tiresome.  Is that the time - when everyone has given up - when gold's value rises?

Pinche Caballero's picture

Mr. Creepy Ol' Cracker, you should know better...

I don't know if gold's value will rise as priced in FRNs, but, I hope in terms of purchasing power gold retains it's past/present value relative to any fiat currency. I don't expect to ever spend it, but rather, consider it just an additional means of preserving wealth across the generations. IMO, it is one more way to withdraw from the current system, reduce excess cash holdings, while maintaining my "wealth" intact as much as possible.

I say one more means, due to the inherent uncertainty of how things may pan out over the months/years ahead. Debt-free living, agricultural property, equipment, tools, guns, lead, gold, silver, blah-blah. You know the drill.

Consuelo's picture

 

 

I think the only people 'giving up' are those that live in a parallel universe where everything revolves around U.S. $paper, while assuming that what has been will always be...   And that's just about the time when you get your knees taken out.