Thursday, September 3, 2009

In a challenge to London, Asian states invited to store bullion closer to home

Hong Kong recalls gold reserves, touts high-security vault

Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday. The facility, industry professionals said, would support Hong Kong's emergence as a Swiss-style trading hub for bullion and would lessen London's status as a key settlement-and-storage center.

Posted by devo @ 10:41 PM (3647 views)
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18 thoughts on “In a challenge to London, Asian states invited to store bullion closer to home

  • I’m thinking of putting all my unwanted jewellery in an envelope and posting it to PaperforGold.com

    What do you think, readers?

    Big hugs.

    Reply
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  • Will ‘taking physical delivery’ be an issue?

    If you own the gold, what’s the problem?

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  • This is a demonstration of a lack of trust in the UK if this is where the gold was originally stored. Also, if you look here,
    http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/commodities/11632/one_month.stm
    you can see that the price of gold took a sharp turn up, whether on this news or some other.

    GB will run us into the ground.

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  • This vault belongs to the Hong Kong government, which since 1997 is controlled by the Chinese government. Would you really trust them not to touch your gold? Chinese banks have plenty of bad loans too.

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  • Allthatglitters says:

    There are a number of ‘points’ that aren’t being noted here. It seems a little too easy to overlook the significance of this more, or the potential sequence of events that could be triggered.
    One line of thought is that apart from further undermining the position of London as an international gold trading centre, it compounds the problems associated with a number of other countries removing their gold from London in the past months. After all, who wants to keep their assets in banks owned by countries that are essentially bankrupt.
    Another line of thought suggests that one of the reason why the gold price went up around $50 per ounce over the past couple of days was due to whoever was supposed to be holding Chinese gold, having to go on the open market to buy what they should have had. If the Chinese weren’t asking for physical delivery, whoever was supposed to be holding it could continue to say, ‘yep its fine, still here’. Obviously taking physical delivery of the gold means they don’t need to take someone’s word that it exists. This has certain parallels with the current questions about the existence or not of the US gold reserves in fort knox, which haven’t been audited since 1956.
    The next line of thought that’s been doing the rounds is the strange pattern of behaviour of the gold market since this announcement and over the past couple of days. Normally gold gains a bit then falls a bit, then gains a bit, then falls a bit. It doesn’t normally keep on gaining, partly some would suggest because of manipulation by governments and central banks (lookup GATA for more details). The pattern over the past few days is extreme unusual which suggests they are new or different dynamics in operation in the Gold market.
    Given the state of our economy, what the Chinese are doing is completely reasonable, and has nothing to do with how trustworthy the Chinese government are. Indeed it would appear that the Chinese are encouraging other nations in the area to more their gold reserves to Hong Kong airport, so that they are safer, and more easily audited.
    So to cut a long story sort, there are all sorts of implications to the Chinese movement of their gold to Hong Kong. One of the less obvious ones is that if you own gold, you’d better make sure its physical gold, as paper gold may well not be worth the paper its written on. (Partly because of suggestions that the amount of paper gold out there, adds up to more than the physical gold.)

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  • HK has got very little gold – just 2.1 tons for a population of 7 million. Mainland China has roughly three times as much per capita, and that’s still very low by global standards – the US has about 90 times as much per capita than HK.

    In volume terms, HK’s reserves equate to two suitcases (gold is incredibly heavy) – doesn’t need much space for storage..

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  • small site 60ft by 60ft
    bigger news is china encoraging persoanl gold and silver holding, this is big news

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  • happy mondays says:

    @5 In volume terms, HK’s reserves equate to two suitcases (gold is incredibly heavy) – doesn’t need much space for storage..

    I have some spare room under my bed, next to my money jar, if the HK Government is struggling for room !

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  • 5. uncle tom said…HK has got very little gold – just 2.1 tons for a population of 7 million. Mainland China has roughly three times as much per capita, and that’s still very low by global standards – the US has about 90 times as much per capita than HK.

    This is interesting info. Perhaps this is the reason why the US$ has always been King?

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  • “Perhaps this is the reason why the US$ has always been King?”

    King of what? The US became the world’s dominant economy because it had 300 million people living with a relatively high standard of living; itself borne of plentiful space and plentiful resources.

    There are many other countries that have done better than the US, in terms of median affluence; but they don’t have the population of the US.

    There is no correlation between gold reserves and national well-being. Some economic basket cases are sitting on loads of gold – e.g. Italy while some prosperous countries have virtually none – e.g. Canada.

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  • We’ll see how much Gold the US has if it ever does an inventory at Fort Knox 😉

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  • Gold is only going one way….buy now before it’s too late!

    Now where have I heard that before?

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  • @hpwatcher – “where have I heard that before” – in St Dominic’s Epistles to the Gold Apostles in Moneyweek.

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  • Thought I’d add my thoughts on this :o)

    It maybe a small amount but it’s the intentions of Hong Kong that you should be looking at.

    from http://www.asiamoney.com/Article/2287111/HK-targets-commodities-trading-hub-status.html

    Hong Kong as opened a depositary to store gold and precious metals at Hong Kong International Airport in a move to tap growing regional commodities demand. It paves the way for the launch of new financial products.

    The 340 square-metre depositary will provide secure storage and physical settlement services to central banks, commodity exchanges, bullion banks, precious metals refineries and issuers of exchange traded funds.

    But, what do the chinese know, after all gold has no purpose in the financial world anymore and they must be gutted to have such a lagging economy and huge deficits… unlike the dollar of course.

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  • “It paves the way for the launch of new financial products”

    aka: lawful avenues for profiting from the Chinese obsession with gambling..

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  • @13

    The chinese are not in the same league as these gamblers though..

    Aug. 20 (Bloomberg) — JPMorgan Chase & Co. and Goldman Sachs Group Inc. topped a list of the biggest credit-default swaps dealers in a Fitch Ratings survey.

    Barclays Plc, the U.K.’s second-largest lender, ranked third. Deutsche Bank AG and Morgan Stanley, both of which had been either first or second in the reports from 2004 through 2006, dropped to fourth and fifth in the survey of 26 banks.

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  • “The chinese are not in the same league as these gamblers though..”

    Give ’em time..!

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  • Hi! i want to buy some gold stuffs from Hong Kong which would e the perfect place to vist for that?

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