You are here

China mounts gold liquidity grab as London market reforms

Section: Daily Dispatches

By Clara Denina
Reuters
Monday, October 19, 2015

VIENNA, Austria -- As the London gold market enters its next phase of reform, a sense of urgency is key because competitors, including commodity consuming giant China, are poised with new products to grab liquidity and global influence.

Global liquidity is shrinking due to persistently low gold prices as the market still struggles to shake off the impact of a seismic crash two years ago. Bruised investors have largely stayed away, while dealing desks have also become smaller.

London, currently the global market nucleus, is re-examining the way bullion is traded after sweeping reform of its price benchmarks.

At the same time, China, the metal's largest consumer and producer, is aiming to become a price setter with its yuan-denominated gold benchmark by the end of 2015, a move that could beat any rivals' effort to increase market share.

"There are too many vested interests and China is likely to win the main prize, because it wants to influence the prices of the commodities it is the biggest user of," one senior London trader said at the opening of the gold industry's annual conference, this year in Vienna. ...

"Central clearing is the way forward, because brokers are finding more difficult to have credit lines open with the few counterparties left, given that many are withdrawing," the head of gold trading at a European bank said. ...

"China is already taking liquidity from the London market and will make its best effort to continue to do so," another trader said. ...

... For the remainder of the report:

http://uk.reuters.com/article/2015/10/19/uk-lbma-gold-conference-idUKKCN...



ADVERTISEMENT

Silver Coins and Rounds with Employee Pricing and Free Shipping

Grab your Silver Starter Kit at cost from Money Metals Exchange, the company named "Precious Metals Dealer of the Year" by industry ratings group Bullion Directory.

Simply go to MoneyMetals.com and type "GATA" in the radio box at the top of the page.

This special silver offer contains 4 ounces of silver coins and rounds in the most popular 1-ounce, half-ounce, and 10th-ounce forms. Claim yours now, because GATA readers get employee pricing and free shipping.

So go to --

http://MoneyMetals.com

-- and type "GATA" in the radio box at the top of the page.



Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Wednesday-Saturday, October 28-31, 2015

https://jeffersoncompanies.com/landing/gata

The Silver Summit and Resource Expo 2015
Park Central Hotel, San Francisco, California
Monday-Tuesday, November 23-24, 2015

http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2015

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16