The Pan Asian Gold Exchange has already begun to trade in local Chinese operations and will be fully operational in about 5 months time. It will initially allow around 350 million customers of major Chinese banks, to buy and sell Gold online. The major difference between this exchange and the Nymex for instance, is that all contracts are 100% backed by physical Gold not the 5% or 10% that Western exchanges offer.
Once this exchange is fully open, demand for physical Gold is expected to increase strongly. The emerging growth nations of the World, the BRICs, have a great belief in Gold and Silver and treat Fiat currencies with great suspicion. If you want to know where the Gold price is headed, look and see what’s happening in Shanghai or Delhi, not New York or London.
It’s worth following the progress of this new venture very closely over the next few months, because it’s likely to have a very large impact on the price of Gold this year and will give strong indications of sentiment in the growth nations towards our western Fiat system. I’m sure everyone is capable of drawing their own conclusions. (For good order sake, I’m long Gold and Silver bullion and have no intention of selling just yet).
