Besides being used to determine daily spot prices for gold and silver, the London/Comex price fix mechanism is also used to settle large trading positions between big banks and investors, and at what price the brokers purchase metals from the originating miners. And on Jan. 28, this mechanism broke right at the time of the daily 'fix', sending silver shooting downward prior to the open when such contracts are settled.
According to Saxo Bank, which participates heavily in the daily metals price fix, this 'flash crash' was not a mistake, and threatens the entire integrity of the London and Comex price determination for commodities such as gold and silver.
At the time of the auction, which begins at 12 noon London time, the spot price was at $14.42 per ounce while the futures price on the CME was at $14.415, leaving a number of market participants extremely confused as to what has happened.
“The LBMA Silver Price is established through a transparent electronic auction mechanism designed to adjust the price until there is equilibrium between buy and sell orders,” a CME spokesman said.
“Given the orders placed in the auction today by five participants, the buy and sell orders became balanced after 29 rounds and the LBMA Silver price was established at a price of $13.58,” CME added.
The difference between silver price and futures prices was nearly six percent but the benchmark cannot be changed, a second person familiar with proceedings told FastMarkets.
“Unfortunately, it’s not [a mistake],” Ole Hansen, head of commodity strategy for Saxo Bank, told FastMarkets. “This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market.”
Another source also suggested that the continued existence of the fix has been put in jeopardy by the huge discrepancy in today’s price, adding that many producers – who still use the price as their daily reference – may have lost significant amounts of money if any contracts have been settled according to the fix. – Bullion Desk
Of course what is at stake is the credibility for London and New York to continue to be the gatekeepers for determining gold and silver prices, especially as China is expected to announce their own price mechanism as early as April. And when this occurs, gold sellers from central banks to the miners themselves will be enticed to leave the confines of the manipulated London price fix and make China the new capital for gold, silver, and all monetary metals... and at a much higher price.
The West for the past five years have used the Comex and London Fix to protect the dollar and suppress the true price of gold and silver as a way to mask the effects of money printing, quantitative easing, and zero interest rates. And a loss of their ability to control prices would suddenly put all currencies in the West in peril, and open the floodgates for a complete lack of confidence in the dollar.
So if the processes that have controlled the price of gold for over a century are starting to break down, and a new gold pricing mechanism is waiting in the wings to take over price discovery, what is the best way for you to protect yourself from a dollar or euro collapse, and to be in at the ground floor of some of the lowest prices in gold that will occur in our lifetimes?
You can do this with a company called Karatbars
Buying gold through Karatbars is one of the easiest things on the net. In fact, the business model of Karatbars is to sell gold in affordable quantities, such as 1, 2.5, and 5 gram increments, and allow customers to get into the metal without having to shell out $1200+ for a single ounce coin.
And as added perks to signing up with Karatbars, as a customer or affiliate, Karatbars is working on a new e-wallet system that functions just like an offshore bank account, and is outside the authority of the banking system. From there, you can take your fiat currency in any denomination... dollars, euros, yen, etc... and purchase physical gold which can either be delivered directly to you, or stored for free at one of Karatbar's vaults.
Additionally, any gold that you buy can easily be sold back to Karatbars, or any metals dealer, and if with Karatbars it is then exchanged for currency that is uploaded to you through a pre-loaded debit Mastercard which is connected directly to your e-wallet. And as we know, MasterCard is recognized in nearly every country around the world, and usable in any currency that accepts it.
But perhaps the best feature with Karatbars is their affiliate program, where you can earn money off commissions from getting others to sign up and become a customer or affiliate. Not only do you receive commissions from their purchasing of physical gold, but you also earn commissions from anyone who buys a commission package, with that money going directly into your debit MasterCard when you have enough units to cycle.
Imagine the ability to earn the money in which to buy your gold savings simply by purchasing a commission affiliate package one time, and then getting others to sign up and do the same thing.
How many businesses or entrepreneurs can build an infinite business with spending less than $400 of their own money? And there is never a mandatory requirement to buy beyond what you desire, on your own schedule. And there is nothing to lose, because you're using money (paper dollars) to buy gold (physical money) and in the end you don't lose a thing.
The global financial system, along with dozens of respected economists, are telling us that now is the time for the end of our current form of money, and the beginning of the transition into a new monetary system that is expected to be backed by gold. And with banks, governments, and even Harvard professors mandating that central banks have no choice but to eliminate cash from usage by the people to stave off collapse, will you wait until it is too late to make a decision on how you will protect your wealth, and be able to function within the coming new monetary system?
To learn more about Karatbars, you can contact the individual who sent you this article, and click on their referral link to open a free account and begin buying, or building your own gold savings or business with the company of the future.