The day that many precious metal owners has been waiting for has arrived, and so far it has not disappointed. On April 19 the Shanghai Gold Exchange officially began their new Yuan denominated price discovery, opening the door for the battle over control of gold and silver prices in the physical markets.
In reaction to this, the Comex spot prices for gold and silver rocketed upwards, with the yellow metal rising over $22.00 in early trading, and silver gaining the most to go over $17.00 per ounce for the first time since May of last year.
China launched its yuan-denominated gold benchmark on Tuesday in Shanghai as it seeks to secure more sway in the pricing of the precious metal.
The Shanghai Gold Benchmark Price (code: SHAU), is the quote for trading of 1kg, 99.99 percent purity bullion, denominated in the Chinese yuan and derived from multiple rounds of trading.
The benchmark was set at 257.97 yuan per gram on Tuesday, the Shanghai Gold Exchange (SGE) said in a statement.
The benchmark also lays the foundation for shifting bullion trading in Shanghai from mostly spot to derivatives to increase the appeal of yuan-denominated bullion trading as financial instruments for both domestic and global investors. – China.org.cn
Setting a new price discovery is just the first of many steps China is intending to implement to eventually seize control over the gold and silver markets, and in bringing about a return to a global gold standard. And while expectations by many Western analysts are for a slow but rising process over time to use the mechanism to empty out Western vaults, this may occur quicker than many believe thanks in part to Deutsche Bank’s revelations last week of institutional price fixing taking place in London and the Comex for several years.
The battle to control the price of precious metals is now on, and from there the battle for currency supremacy will be the ultimate prize. And in between will see redemption for gold and silver owners who have been beaten down since 2013 by the West to protect the dollar at all costs.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.