The Gold Watcher: hongkong

Wednesday, May 18, 2011

Hong Kong Mercantile Exchange Starts Trading Gold, In U.S. Dollars

Although there was some talk about the Hong Kong Mercantile Exchange (HKMEx) trading gold futures in renminbi, the trading got up and running with contracts denominated in greenbacks. Unlike other commodities exchanges, the HKMEx is going to be open for fifteen hours each weekday: 8 AM to 11 PM Hong Kong time, midnight to 3 PM Greenwich Mean Time, or 8 PM to 11 AM Eastern Daylight-Savings Time. The contracts are 32 troy ounces in size.

As of 5:30 p.m. local time, HKMEx gold for August delivery traded at US$1,492.7 a troy ounce. A total of 3,415 contracts were traded, valued at US$163.33 million, the exchange said in a statement....

"With our launch today, we are well on our way to becoming the world's gateway for commodities trading with China," said Albert Helmig, president of the exchange.

Looks like a good start. The exchange's decision to trade in greenbacks confirms the U.S. dollar price as the primary price of gold. Where they came up with 32-ounce contracts, I don't know.

Wednesday, April 27, 2011

New Hong-Kong-Based Commodity Exchange To Debut With Gold Contract

Mainland Chinese state-owned companies and a Russian billionaire have put together a new commodity futures exchange in Hong Kong, the Hong Kong Mercantile Exchange (HKMEx.) The first contract set to debut is for gold.

“Our new platform will offer Asia a bigger say in setting global commodity prices,” said Barry Cheung, chairman of HKMEx.

After gold futures, the exchange plans to introduce other products including precious and base metals, energy, agriculture and commodity indices.

There are gold exchanges in mainland China already, but they're closed to international dealers. The HKMEx won't have that restriction. Gold was chosen because Hong Kong already has a large physical gold market, and it's an important port for bringing gold into the rest of mainland China. The trading day will be an unusually long 16 hours.

All I can say is, it's about time. It'll be interesting to see what the gold-is-manipulated crew makes of it.

Rationale

This blog is a continuation of its predecessor, The Gold Bubble. It is not associated with "The Goldwatcher" Website. If you're looking for "The Goldwatcher: Demystifying Gold Investing" or the work of John Katz, you can find it here.

Originally, The Gold Bubble was a perch for me to watch what I pegged as a nascent gold bubble - or, to be less controversial, the third stage of a long-term gold bull market.

As time went on, I drifted towards commentary on gold and the greenback, plus the interrelation between the two. The rest of the posts featured items about gold that I thought were interesting. I ended up diverging from the theme that the title promised.

So, I've reactivated the old blog under a different name. "The Gold Watcher" is a more accurate title for the blog that The Gold Bubble became.

The Enter Stage Right article that kicked off the predecessor blog contains a fuller explanation of my reasoning about a gold bubble: it's here. A sequel is here.

I'm also writing goldbug fiction. An annotated table of contents is available so you can choose any you'd like to read.

Disclaimer

Although I try to compensate, I do have opinions that are almost certainly influenced by what I've done with my own money. For the record, I am long gold-exploration stocks. On the odd chance I mention one that I own, I'll disclose it fully. I don't own any physical gold, nor do I own any producers or any well-known explorers.

Also, I must emphasize that I am not a registered investment advisor, and that I am not licensed to dispense investment advice in my jurisdiction of residence (Ontario, Canada). Consequently, this is not an investment-advice blog. It shouldn't be taken as such. I cannot provide any actionable material in the standard sense of the term; if you're intrigued by anything here, you'll have to see to your own trigger.

In addition to the standard boilerplate caution for you to do your own due diligence should you invest or speculate, I'd like to add a special caution: gold, by far, is the asset class that elicits the most emotions. A solid consensus of experieced investment professionals considers emotionality to be a performance-hobbler. In addition to doing your own research, and/or using a licensed professional to do so, I suggest that you watch yourself.