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Thread: Shanghai Gold Exchange Devours Most of the Annual Global Gold Mining Supply

  1. #1

    Shanghai Gold Exchange Devours Most of the Annual Global Gold Mining Supply

    The Shanghai Gold Exchange delivered another 45 tons of gold for the week ended 3/27/2015. To date the exchange has delivered 610 tons of gold. Annual gold mining supply is about 2600 tons.


    https://smaulgld.com/shanghai-gold-e...march-27-2105/

    Attached Thumbnails Attached Thumbnails shanghai gold exchange volume vs global gold mining production.PNG  
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  3. #2
    Note that "physical delivery" means changing the name of who owns the gold- not gold physically removed from their vaults. There may be some confusion on this point. If I bought 100 ounces on the exchange and sold it to Steve and he in turn sold it to Bob, no gold left their vaults but it would show up as 200 ounces delivered. They are not physically handling all the gold produced in the world. "Exchange volume" is how many transactions occurred. The same gold shares can be sold over and over which increases the "physical delivery" numbers without necessarily meaning the exchange brought in and shipped out that much actual gold.

    https://www.bullionstar.com/blogs/ko...ange-part-one/

    When you become a customer of the Exchange you will receive a trading code that is connected to your identity (or company) until infinity, no matter if you switch broker twice a week this code will stick with you until death does you part (article 17). Subsequently, you will be attributed two accounts:

    – The first is your Bullion Account; each customer’s physical deliveries, load-in and load-out amounts shall be recorded in its Bullion Account. Note, physical deliveries are not withdrawals from the vaults. As we can read from Article 85 of the Spot Trading Rules of the Shanghai Gold Exchange:

    Article 85

    The term “Physical Delivery” refers to the act of transferring the ownership of the precious metals traded by the Exchange for the performance of the terms of a trade.
    In physical delivery the Exchange transfers precious metals from one Bullion Account to another.
    Given their rules on taking physical delivery, most trades are probably not taking actual metal from their vaults.

    The most basic way of trading bullion on the Exchange is through physical products (which do not enjoy leverage or fractional backing): After submitting a buying order of the respective product you wish to purchase on the Exchange, your order has to be matched with a seller’s order before a deal can be closed. When a deal is closed physical products are settled the same day. The amount of RMB in full is transferred from your Margin Account to the seller’s Margin Account and the corresponding amount of bullion is transferred from the seller’s Bullion Account to your Bullion Account. You would now be the owner of physical gold (located in an SGE(I) Certified Vault) and are free to process your bullion to your discretion. From the Spot Trading Rules of the Shanghai Gold Exchange:

    Article 46

    To trade in a physical product, a buyer must possess funds of an amount equaling the total transaction value of the product when placing the order; and a seller must have the corresponding full amount of physical bullions in its trading account when placing an order. After an order is placed, the funds or physical bullions covered by the order will be frozen immediately.
    After an order on physical gold product is filled, the buyer may re-sell the purchased gold on or after the current trading day, or may request to withdraw the gold.

    From the Detailed Rules for Physical Delivery of the Shanghai Gold Exchange:

    Article 18

    A member or customer trading in a physical gold or platinum product may request to withdraw the gold or platinum bullions as soon as the trade is executed.
    Settlement on the same day a deal is closed is referred to as (T+0) settlement.

    Be aware of the fact that when bullion is withdrawn from a MB or IB Certified Vaults it’s not allowed to re-enter these vaults before it is melted and re-assayed again. From the Detailed Rules for Physical Delivery of the Shanghai Gold Exchange:

    Article 23

    Any gold bullion withdrawn by a member or customer shall not be loaded into any Certified Vault in the future.
    I was curious about how they operated and thought others might be interested in the information as well.
    Last edited by Zippyjuan; 04-04-2015 at 06:38 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    I am Zippy and I approve of this post. But you don't have to.

  4. #3
    The difference between the shanghai gold exchange and the comex is that the physical gold must be available to deliver
    In contrast, comex trades even more gold than the shanghai gold exchange - but that gold is in the form of futures contracts for which there is not a corresponding physical amount of gold.
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  5. #4
    Quote Originally Posted by Smaulgld View Post
    The difference between the shanghai gold exchange and the comex is that the physical gold must be available to deliver
    In contrast, comex trades even more gold than the shanghai gold exchange - but that gold is in the form of futures contracts for which there is not a corresponding physical amount of gold.
    The information posted by Zippy shows that its talking about spot trading. You can't compare spot & futures trading; they have different purposes, & therefore different trading-requirements. Spot market is more focused on delivery while futures market is more focused on hedging & price discovery (although delivery is possible).

    Contrary to the popular belief amongst gold-enthusiasts, those who don't take/make delivery don't drive prices in the long-run, actual consumers & producers do because in the long-run, the net-position of speculators is nil, they primarily help in keeping the markets liquid.
    There is enormous inertia a tyranny of the status quo in private and especially governmental arrangements. Only a crisis actual or perceived produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
    - Milton Friedman

  6. #5
    You can and should compare them precisely for the reasons you stated!
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  7. #6
    Quote Originally Posted by Smaulgld View Post
    You can and should compare them precisely for the reasons you stated!
    I said, they are different & that's why they have different trading-requirements. It's like saying why apples aren't orange like the oranges, if you want to make such comparisons then go ahead but I'd rather not.
    There is enormous inertia a tyranny of the status quo in private and especially governmental arrangements. Only a crisis actual or perceived produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
    - Milton Friedman

  8. #7
    A good way to understand two similar things is to note their differences.
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  9. #8
    How much gold does the Shanghai Gold Exchange actually hold in its vaults? Or is it just a trading center like the New York Stock Exchange? I can't find anything which indicates they are anything more than a trading center- a mediary- between gold dealers. Afterall, it is called an "exchange".

    http://www.marketswiki.com/mwiki/Shanghai_Gold_Exchange

    Shanghai Gold Exchange (SGE) is a non-profit self-regulatory organization, approved by the State Council, organized by the People's Bank of China, and registered with the State Administration for Industry & Commerce, for the purpose of trading gold, silver, platinum and other precious metals.[1]
    In May 2010, the exchange announced it was planning to offer gold exchange-traded funds (ETFs), driven in part by strong Chinese demand for gold. Gold demand in the first quarter of 2011 more than doubled, surpassing India as the largest market for gold coins and bars, according to the World Gold Council. [2]

    In March of 2008 the China Banking Regulatory Commission (CBRC) issued permits allowing Chinese commercial banks to trade gold futures on the Shanghai Futures Exchange (SHFE). Commercial banks are required to be members of the SGE and the SHFE before conducting gold futures trading through the SHFE. Moreover, banks must have a capital adequacy ratio of over eight percent, the CBRC announced.[3]

    The People's Bank of China gave approval to the Shanghai Gold Exchange in mid-2007 to accept foreign banks as members. Foreign banks applying to be accepted as members of China's Shanghai Gold Exchange should be locally incorporated
    It sounds like it is a futures exchange.

    The Shanghai Gold Exchange launched a gold trading platform with eleven yuan-denominated gold contracts on September 18, 2014.[5] The international board, as the platform is known, is in the city's free-trade zone, making it open to foreign investors.[6] [7] The contracts on the new exchange will be physically settled and will be traded between bullion banks, refiners, producers and trading houses.
    Last edited by Zippyjuan; 04-05-2015 at 02:40 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    I am Zippy and I approve of this post. But you don't have to.



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  11. #9
    Under this list of gold exchanges http://www.goldmoney.com/wiki/gold-t...-and-exchanges
    they list three physical exchanges:
    Physical Exchanges


    ● London: LBMA

    ● Turkey: Istanbul Gold Exchange

    ● UAE: Dubai Multi Commodities Centre

    And ten "commodity futures exchanges" including:

    ● China: Shanghai Gold Exchange; The Chinese Gold & Silver Exchange Society
    So it seems they ARE a futures trading market. They aren't moving 2,000 tonnes of gold through their vaults a year (that would be about one quarter of the entire US stockpile- the largest in the world).
    Last edited by Zippyjuan; 04-05-2015 at 04:00 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    I am Zippy and I approve of this post. But you don't have to.

  12. #10
    Quote Originally Posted by Zippyjuan View Post
    How much gold does the Shanghai Gold Exchange actually hold in its vaults? Or is it just a trading center like the New York Stock Exchange? I can't find anything which indicates they are anything more than a trading center- a mediary- between gold dealers. Afterall, it is called an "exchange".
    You suck at google-fu then. It's one thing to argue the other side of the coin but now you're just lying. There's a $#@! load of results for shanghai gold exchange vaults search terms. Videos, articles, etc.

    Seems someone does NOT want people to hold physical gold and is going into overdrive with outright lies to dissuade it. Hmmm....I wonder why?
    Last edited by devil21; 04-05-2015 at 09:32 PM.
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  13. #11
    Quote Originally Posted by devil21 View Post
    ...but now you're just lying.
    The ZippyJuan account has been awful disingenuous lately.
    Quote Originally Posted by TheCount View Post
    ...I believe that when the government is capable of doing a thing, it will.
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    which one of yall fuckers wrote the "ron paul" racist news letters
    Quote Originally Posted by Dforkus View Post
    Zippy's posts are a great contribution.




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