London and New York dominate gold trading, but some analysts think Hong Kong may soon become a more significant player. Its success could solidify China’s place in the world gold market, strengthen the yuan, and shift more economic power from west to east.
Last May, Hong Kong Exchanges and Clearing (HKEx) announced plans to launch gold futures contracts.
This won’t be the first attempt to establish a gold exchange in Hong Kong. A government backed exchange launched in 2011, but the the Hong Kong Mercantile Exchange (HKMEx) folded after just two years.
According to the South China Morning Post, the HKEx is in a much better positioned to succeed where its predecessor failed.
HKEx will fare better. With quarterly revenues of HK$3 billion, it boasts enviable financial strength. As owner of the London Metal Exchange, it can command considerable expertise in commodity futures. And with the Hong Kong government as its largest shareholder since 2007, it enjoys powerful official backing.’
This post was published at Schiffgold on Aug 14, 2017.
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