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Is China Intentionally Making It Harder To Manipulate Gold? - Rory Hall/Dave Kranzler

Is China Intentionally Making It Harder To Manipulate Gold? - Rory Hall/Dave Kranzler
By Rory Hall/Dave Kranzler 7 months ago 6598 Views 1 comment

May 16, 2017

A new gold futures contract is being introduced by the Hong Kong Futures Exchange (two contracts actually). The two contracts will be physically settled $US and CNH (offshore renminbi) gold futures contracts. The key to this contract is that it requires physical settlement of the underlying gold, which is a 1 kilo gold bar.

The difference between this contract and the Comex gold futures contract is that Comex contract allows cash (dollar aka fiat currency) settlement. The Comex does not require physical settlement. In fact, there are provisions in the Comex contract that enable the short-side of the trade to settle in cash or GLD shares even if the long-side demands physical gold as settlement.

With the new HKEX contract, any entity that is long or short a contract on the day before the last trading day has to unwind their position if they have not demonstrated physical settlement capability.

The new contract also carries position limits. For the spot month, any one entity can not hold more than a 10,000 contract long/short position. In all other months, the limit is 20,000 contracts. A limit like this on the Comex would pre-empt the ability of the bullion banks to manipulate the price of gold using the fraudulent paper gold contracts printed by the Comex. It would also force a closer alignment between the open interest in Comex gold/silver contracts and the amount of gold/silver reported as available for delivery on the Comex.

To be sure, the contract specifications of the new HKEX contracts leave the door open to a limited degree of manipulation. But at the end of the day the physical settlement requirement and position limits greatly reduce the ability to conduct price control via naked contract shorting such as that permitted on the Comex and tacitly endorsed by the Commodity Futures Trading Commission.

You can read about the new HKEX contract here – HKEX Physically Settled Contract – and there’s a link at the bottom of that article with the preliminary term sheet.

Will this new contract help moderate the blatant price manipulation in the gold market by the western banking cartel? Maybe not on a stand-alone. But several developments occurring in the eastern hemisphere – as discussed in today’s episode of the Shadow of Truth – and among the emerging bloc of eastern super-powers will begin to close the window the ability of the west’s efforts to prevent the price of gold from transmitting the truth about the decline of the U.S. dollar’s reserve status and the rise of geopolitical instability:



Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.


Dave Kranzler

Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at dkranzler62@gmail.com.


The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

M11S 7 months ago at 3:57 PM
The US may be losing some of its leverage to manipulate gold. When we took Germany's gold after ww2 we also made them sign several "secret treaties" and not one peace treaty. The "secret treaties" were confirmed by the retired head of the German defence dept. MAD. It gives the allies total control over all German affairs including media, education, policy, and gold. Which is why Germany's current gold is in the Federal reserve. But they were allowed to bring half of it home recently? The fed might not want a gold-run similar to what France and Nixon did?

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