Thursday, September 1, 2016

China's gold market may be making move on Comex as prices in Asian market go higher than London spot

The one big fear that both London and the U.S. Comex have in their long-standing control over the world's gold price may soon be coming to pass as prices at the Shanghai Gold Exchange (SGE) are climbing higher than the London fix, opening the markets up to a potential arbitrage that could wipe out the West's supply of the precious metal.

On Sept. 1, the day that China began selling M SDR bonds on the open market, the price of gold at the SGE opened $9 above the London fix price, making it more profitable for both miners and sellers to participate in the Chinese market over both London and New York.

Shanghai morning fix (10:15 pm est last night) 
$1319.72   (price in NY on access at the exact same time:  $1310.94) 
Shanghai afternoon fix:  2: 15 am est (second fix/early this morning) 
$1315.99    (New York price at the same time: $1313.30) 
The two London fixes:
Aug 31 2016 am:$1314.45  (2 am est)
pm:$1309.25 (10 am est) 
Take a look at the Shanghai fix.  Their early morning fix (our late at night time zone) saw the fix at $1319.72.  The exact NY price at the time was 1310.94 for a difference of almost 9 dollars. 
The second fix has:  Shanghai at 1315.99 with NY at 1313.30 an the exact same time/the London fix came in at 1314.45 with timing 15 minutes later 
It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex. - Silver Doctors