"...The LBMA appears now to be in an intractable and rapidly degenerating position - with the vaulted gold available outside of the Bank of England and ETF holdings largely gone from London, how do you manage the appearances of a spot gold market with turnover of 200M oz per day and a massive open interest? While gold flow from the miners provides some liquidity and enables the LBMA paper gold market to provide some gold delivery and suppress gold prices, it is obvious that a massive gold event has occurred and that this paper market will not be the same given increased pressure for physical delivery. The London market cannot sustain any material gold withdrawal as occurred in 2013.
We now approach an event that may provide the catalyst for the inevitable repricing of gold and expiry of the LBMA paper/digital gold scheme. That event is the April 19, 2016 initiation of a daily spot
domestic Gold Fix on the Shanghai Gold Exchange (SGE) that will be followed at a
later date for the SGE
international gold market. The SGE is very different from the LBMA unallocated paper gold market in that for a standard kilo gold contract to be issued, first a kilo of 99.99% pure gold delivered directly from an approved refinery must be deposited with the SGE.
This creates a problem in that a daily spot SGE Gold Fix based on actual gold trading in Shanghai is going to diverge at some point from the LBMA daily Gold Fix trading unallocated paper gold contracts in London. A price premium on physical gold in Shanghai cannot be extinguished with paper gold from London. A lack of Western bullion bank interest in the new SGE Gold Fix is understandable as it would create a conundrum that a participating bank would have to explain if there were two materially different spot gold prices posted daily that could not be arbitraged away: one price for spot gold on the SGE for physical gold and a second price for spot 'gold' in London based upon trading paper. The market will then progressively degenerate into a much higher global price for gold as the LBMA is pushed to the sidelines..."
http://www.24hgold.com/english/buy_sell_gold_coins.aspx?co_id=71&ms=1164772D5010
... Since the above & post Deutsche's "
cooperation in pursuing claims" against other members of the cartel, i.e., exposing the manipulation of other cartel members, the class action lawsuits have begun. Overnight, two on behalf of Canadian gold and silver investors were launched in the Ontario Superior Court of Justice... No doubt the briefs of other western nations will want a piece of this cash cow...
