http://www.zerohedge.com/news/2013-07-11/paper-vs-physical-gold-picturing-comexsge-divide
Chinese gold demand, from both individuals and central banks,
garnered increasing attention as the gold price rose consistently in the
last twelve years. When the gold price declined, many in the
West declared the end of gold, but China (along with many other Asian
nations) defiantly continued to buy gold and increase their imports.
Questions over the legitimacy and transparency of COMEX and the London Gold markets are now becoming louder,
especially as increasing numbers of institutions are keen to know what
actually backs those contracts. ‘Paper gold’ is on everyone’s lips.
When it comes to the SGE, there seems to be little concern over the
presence of physical gold, given the increasing volumes of activity in
the three largest contracts, two of which are available for immediate
delivery. Delivery ratios are significantly higher than those on COMEX, showing the far higher of physical participation in this market.
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