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Monday, July 13th, 2020 MST

The death of a dinosaur

Friday, March 20, the nearly 100-year old manually done London gold fix will end, replaced by an electronic version.  The question is will the new method result in a more transparent London fix or will it be a continuation of the same old game.

Lawrence Williams, writer for mineweb.com, questions that things will “be different this time.”  He notes, in Fixing the Gold Fix – with or without the Chinese banks? that Chinese banks, despite being huge players in the gold market and having all the qualifications, will likely be excluded.

China is not only the world’s largest gold producer but also is world’s largest gold importer.  China is not only adding to its official reserves but has it liberalized facilities for gold (and silver) buying by the people of China.  In China, gold is in play.

To leave Chinese banks out of the new fixing process is to revert to 1800’s thinking when the Western world considered China irrelevant despite it being the most populous country.  Today, China is more than the most populous country.  It is an economic powerhouse, and one of its banks should be included in the new London fix for gold.

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