Gold Price Discovery Shifting to Physical Shanghai Gold Exchange as Prices Diverge vs LBMA

Jon Blogosphere, Corruption, Economy, Gold, Market Commentary, Precious Metals

The launch of the Shanghai Gold Exchange (SGE) was a promising event for gold investors. The exchange provides a new benchmark price for gold bullion with a much higher backing of contracts by actual physical metal. Many hope this new price benchmark will challenge or one day replace the Western price benchmarks that are widely believed to be manipulated.
To underscore the importance of this new pricing center, Craig Hemke of the TF Metals Report said:
This is one of the biggest developments that we’ve seen in the physical market in maybe a hundred years in that for the past 97 years total pricing, let’s call it pricing ability, on the wholesale market has been controlled in London through the twice daily fixes.
It’s actually priced in the local currency, the yuan. It’s a very big development. It is a natural occurrence in that all of the gold is migrating to the East so therefore the pricing power should be migrating to the East as well.

This post was published at GoldStockBull on December 2nd, 2016.