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Shanghai Gold Exchange Withdrawals Running at Record Pace

Commodities / Gold and Silver 2015 Oct 17, 2015 - 06:21 PM GMT

By: Jesse

Commodities

Withdrawals of gold from the Shanghai Exchange alone are at 1,958 tonnes for the year. The first chart below compares that pace to the prior years.

As I noted the other day, the mispricing of value and risk in the gold market, primarily driven by traders in London and New York, is calling a form of Gresham's Law into action.


Gold in the New York and London vaults is heavily leveraged and hypothecated. The full extent of this is not disclosed and can only be surmised.

If the tide of gold keeps going out at these amounts, we will see who is wearing what, as the old traders say.

Is this a 'problem' that we need to save them from? Hardly. This is a problem which they have created by manipulating this market and trading it with reckless disregard as they have done with so many others.

The only 'help' they require is to allow the market to set the price, and abide by some modest rules of leverage and risk management, rather than sacrificing safety and fairness for short term gains.

Gold is flowing from West to East. Of this there should be little doubt except for the most hardened apologists for the bullion banks.

By Jesse

http://jessescrossroadscafe.blogspot.com

Welcome to Jesse's Café Américain - These are personal observations about the economy and the markets. In providing information, we hope this allows you to make your own decisions in an informed manner, even if it is from learning by our mistakes, which are many.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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