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Russia & China could set international gold price based on physical gold trading

RT | December 3, 2017

Since Russia, China, India, Brazil & South Africa are all either large producers or consumers of gold, or both, it is highly likely that the BRICS bloc they constitute could focus its cross-border gold trading network on trading physical gold.

Gold pricing benchmarks from such a system would be based on physical gold transactions, which is a departure from the way the international gold price is currently established.

Such a system would also be a threat to “gold” trading markets in London and New York. The London Over-the-Counter (OTC) and the New York COMEX futures exchange currently set the international gold price.

OTC and COMEX are really trading synthetic derivatives on gold, and are completely detached from the physical gold market. In London, the derivative is fractionally-backed unallocated gold positions which are predominantly cash-settled. In New York the derivative is exchange-traded gold future contracts which are predominantly cash-settled and backed by very little real gold.

The major gold producers Russia, China and other BRICS nations could change the way the international gold prices are set currently – in a synthetic trading environment which has very little to do with the physical gold market.

BRICS cooperation in the gold market was first unveiled in April by the First Deputy Chairman of Russia’s Central Bank, Sergey Shevtsov, during a visit to China.

“We (the Central Bank of the Russian Federation and the People’s Bank of China) discussed gold trading,” he said. “The BRICS countries (Brazil, Russia, India, China and South Africa) are major economies with large reserves of gold and an impressive volume of production and consumption of the precious metal. In China, gold is traded in Shanghai, and in Russia in Moscow. Our idea is to create a link between these cities so as to intensify gold trading between our markets.”

December 2, 2017 - Posted by | Economics | ,

2 Comments »

  1. The recovery in mid-1930’s Germany arose with a fiat currency system that was separated from Rothschild banking.

    Fiat currency functions to lubricate commerce. The Federal Reserve accelerated and exacerbated the Great Depression by taking 30% of currency out of the system in the beginning of the depression.

    Prosperity for the commoners is better assurred not by gold, but by lesser metals which are attainable by the masses.

    Watch SECRET OF OZ to learn about money. Worship of gold plays into those who have the gold and make the rules.

    Comment by rediscover911com | December 2, 2017 | Reply

    • Even when the gold price was linked to the US Dollar, it was “pegged” at US$32/oz. I suspect that the “REAL” price of gold is a lot higher than the ‘official’ price of gold(which is set in London and New York) by the people who “own” the “market”(and LOTS of the Gold itself).
      “Free Market” doesn’t mean what it implies.

      Comment by Brian Harry, Australia | December 3, 2017 | Reply


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