Saturday, October 22, 2016

Gold price difference out of China now up to $5 more than in London or Comex

On Oct. 18 the spread in gold price between the Shanghai Gold Exchange (SGE) and the London/Comex gold fix was a record $5 as the Eastern physical markets continue to ever so slowly pull away from the Western paper gold markets.

The SGE is the largest physical gold market in the world, and commenced declaration of its own gold price back in April of this year.  And over the course of 2016 they have intermittently increased the spread between themselves and the purely paper markets run out of London and New York.

Shanghai Gold Exchange fix times: 10:15pm est and 2:15am est 
London gold fix times: is at 5:30am est and 10am est 
Shanghai morning fix OCT 18 (10:15 pm est last night):  $1276.80 
NY ACCESS PRICE:   $1271.50 (AT THE EXACT SAME TIME) 
Shanghai afternoon fix:  2: 15am est:  $1274.31 
NY ACCESS PRICE:   $1269.70 (AT THE EXACT SAME TIME) 
Spread between each market at both fix times:  $5 difference – Silver Doctors
As this difference in price continues to expand, it will eventually create an price evaluation where gold miners will stop selling their products to the Comex or LBMA, and find it more affordable and profitable to ship their gold to Chinese markets..  Likewise, it will also eventually lead to an arbitrage where traders will buy all the gold up in both London and New York, and then sell it to Shanghai causing an asset flight from West to East.