DOCSLIB.ORG

The Bank's Golden Evolution

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Bank's Golden Evolution ISSUE 95 October 2019 The Bank’s International Golden A PRICE Development Evolution BENCHMARK of the SGE Interview with the FOR THE AGES By Wang Zhenying - page 11 Bank of England - page 4 By Rachel Harvey - page 21 SAVE THE DATE! Global Precious Metals Conference 2020 11-13 OCTOBER EPIC SANA Lisboa Hotel, [email protected] Lisbon, Portugal www.lbma.org.uk/events ALCHEMIST ISSUE 95 EDITORIAL ISSUE BY THOMAS KENDALL, CHAIR OF LBMA’S PUBLIC AFFAIRS COMMITTEE AND HEAD OF PRECIOUS METALS SALES, ICBC STANDARD BANK PLC HIGHLIGHTS The Bank’s Golden Evolution - A Q&A Session The basic The programme will be kick-started by a With Victoria Cleland and keynote speech from James Kynge, Emerging Ruth Crowell, page 4 numbers are Markets Editor for the Financial Times. 100 Years of the Gold Price - Part Four impressive James is one of the most-experienced Western By Dr. Michele Blagg and journalists covering Asian affairs, having spent when it comes Fergal O’Connor, page 8 over two decades in the region for Reuters and, to China and since 1998, for the FT. He’s exceptionally well The International Development gold: $90+ placed to put the current macroeconomic and of the Shanghai Gold Exchange geopolitical forces into context. By Wang Zhenying, page 11 billion in official reserves; The session focusing on innovation in the Jeremy East: Shining a Light on Asia 400+ tonnes in mine Chinese gold market will cover developments Interview with Aelred Connelly, page 14 production; 15+ million on the exchanges, in the jewellery market, in clearing and vaulting, and in both retail A Price Benchmark for the Ages ounces traded onshore and investor products. The speakers are all By Rachel M. Harvey, page 21 leading figures from the Chinese gold sector, daily. There is no bigger representing the Shanghai Gold Exchange, SBMA’s Silver Jubilee & Beyond market and no market Chow Tai Fook, Industrial and Commercial By Albert Cheng, page 26 Bank of China, Ping An Bank and Bosera Centenary of the Gold Price Reception that has evolved as rapidly Asset Management. By Aelred Connelly, page 30 over the past 15 years. Key trends in the platinum group metals will be addressed in the afternoon session, with Facing Facts Innovation is continuing at pace at both the By Federico Gay, page 32 the speakers delivering first-hand insights into macro and micro level, and so it is appropriate trends in PGM use in automobile catalysts that the 20th LBMA/LPPM Conference is Regulation Update (Chery Automobile Co), the fibreglass sector returning to China. By Rachel Hart, page 35 (Owens Corning) and how platinum jewellery The location of INNOVATION IS fabricators are responding to market Front cover – Victoria Cleland and Ruth Crowell Shenzhen is also challenges (Shenzhen Long Jia Jewellery in the gold vaults at the Bank of England. apposite. It is both CONTINUING AT Industry Co.). A longer-term perspective a microcosm of PACE AT BOTH THE will be provided by Anglo American China’s economic MACRO AND MICRO Platinum with the latest thoughts on We have also put together an eminent price development and LEVEL AND SO IT how the developing hydrogen economy forecasting panel, comprising experts from the heart of the IS APPROPRIATE will affect platinum demand. the Bank of China, Norilsk Nickel, Standard country’s gold and TH Chartered and Kingold Financial Services. THAT THE 20 This year, we have two very strong platinum jewellery Philip Klapwijk has stepped forward to take on keynote presentations to start the manufacturing sector. LBMA/LPPM the unenviable task of teasing out some key CONFERENCE second day. The Central Bank of the takeaways from what should be a lively debate. The timing appears IS RETURNING Philippines has been actively involved to be right too. The TO CHINA in both the local gold mining sector and The Conference will then be rounded out by liberalisation of China’s the international gold market over the the ever-popular delegate feedback session financial markets is progressing, with past decade and the Assistant Governor will and Conference wrap-up, where those who restrictions on offshore investors’ access to share some of her experiences and thoughts. were too busy to attend all the sessions they onshore equity, bond and commodity futures Following that, Zijin Mining — one of the most wanted to can get a pithy summary (of sorts). markets steadily being lifted. Recent product active Chinese mining groups to This year, we’ve released the developments include the imminent launch invest offshore — will examine WE WISH ALL previous incumbents from this of the SGE & CME Group’s new futures key challenges facing the global CONFERENCE duty and have passed it to the contracts based on the Shanghai Gold mining sector. ATTENDEES A Stan Laurel and Oliver Hardy of Exchange benchmark, the SGE International PRODUCTIVE AND the precious metals markets. That will lead into a panel Board’s ‘Gold Road’ leasing project and session for producers, which will SUCCESSFUL In this centenary year of the plans for an ETF backed by China’s famous be introduced and moderated EVENT LBMA Gold Price, we don’t Gold Panda coins. by Investec’s Gold Portfolio Manager, with underestimate the challenges that parts of the All this activity comes, of course, against contributions from Franco Nevada, Paxos and market are facing, but we also look forward the helpful backdrop of a gold price that had ABC Bullion. with confidence and wishall Conference returned 23% in US dollars by the beginning attendees a productive and successful event. It should prove a lively discussion as there is a of September and surpassed Rmb 350 per lot to talk about – whether shareholder returns, gram for the first time in seven years. It’s use of technology, responsible sourcing, bar also been a fairly dramatic first nine months integrity or the changing refining landscape. for the platinum group metals. So delegates at this year’s Conference can expect to get some interesting insights into these global and regional trends. 3 ALCHEMIST ISSUE 95 The Bank’s Golden Evolution – A Question & Answer session with Victoria Cleland, Bank of England For this issue of the Alchemist, Ruth THE BANK HAS A LONG HISTORY AND A VERY IMPORTANT ROLE IN THE FINANCIAL SYSTEM. CAN Crowell interviewed Victoria Cleland, YOU SAY A LITTLE MORE ABOUT ITS ROLE WITH the Executive Director for Banking, REGARDS TO GOLD? Gold has been an important aspect of the Bank’s role since we were Payments and Innovation at the founded in 1694 (we are celebrating our 325th birthday this year, Bank of England. Here is what alongside the centenary of the first London Gold Price), reflecting we learned. gold’s significance within official foreign exchange reserves. The Bank opened a purpose-built London I HAVE OVERSIGHT OF THE vault in 1697 in response to VICTORIA, BEFORE WE START SECOND-LARGEST GOLD the first significant gold rush. DISCUSSING GOLD, IT WOULD BE VAULT IN THE WORLD BY This saw an influx of gold from INTERESTING TO KNOW A LITTLE BIT Brazil to London. The Bank’s ABOUT YOUR BACKGROUND, SUCH VALUE OF GOLD IN CUSTODY AS YOUR CURRENT ROLE AT THE BANK ‘bullion warehouse’ served the AND THE POSITIONS YOU HAVE HELD entire European market, and the subsequent gold rushes in California, IN THE PAST? Australia and South Africa led to the storage of even more gold in the Bank’s vaults. Thanks Ruth, as Executive Director for Banking, Payments and Innovation, I have responsibility for the operation and strategic Today (a sunny day in early September 2019), we hold around development of our payment system services, including the UK’s Real- 400,000 gold bars in our vaults, currently worth approximately £200 Time Gross Settlement infrastructure, which settles over £650 billion billion, making up 15% of official declared gold reserves globally. We of sterling payments and securities transactions daily. As well as are the largest gold custodian in the UK – we hold over 65% of the having responsibility for our wholesale and retail banking operations, gold in London. I also have oversight of the second-largest gold vault in the world by value of gold in custody. THE BANK’S ROLE IN THE GOLD MARKET HAS A RICH HISTORY, BUT CAN YOU TELL ME ABOUT THE I have spent my career at the Bank of England covering an exciting SERVICES YOU CURRENTLY PROVIDE? and varied selection of jobs. Most recently, I was Chief Cashier, The Bank provides a gold custody service specifically designed for our responsible for banknotes and leading our work on digital currencies. central bank customers. We currently have around 70 such customers I oversaw the launches of the £5 and £10 polymer notes, with and this service supports their reserve management requirements in each bearing my signature. Prior to this, I was Head of the Special gold. Alongside monetary stability, a core part of the Bank’s mission Resolution Unit and Private Secretary to the Deputy Governor. is to maintain financial stability. Our gold service contributes to this by Alongside my day job at the Bank, I am also executive sponsor of our providing central banks with access to the liquidity of the London gold staff disAbility Network and Bicycle Users Group. market, the largest gold market in the world. 4 ALCHEMIST ISSUE 95 The Queen and the Duke of Edinburgh visiting the Bank’s gold vaults in December 2012. The Bank also provides safe custody for the UK’s gold reserves, on behalf of Her Majesty’s Treasury. We also provide services 400,000 to a few commercial firms which facilitate access for central banks to the London gold bars in our vaults gold market.
Load more

Recommended publications
  • Swiss Gold Initiative
    SWISS GOLD INITIATIVE Version 04: A briefing analysis prepared for the SGI Initiative on the current global Gold market set in its historical context. Alan Leishman 04.03.2014 Swiss Gold Initiative 04 Alan Leishman 1 13.11.2014 SWISS GOLD INITIATIVE ‐ The gold of the Swiss National Bank must be stored physically in Switzerland. ‐ The Swiss National Bank does not have the right to sell its gold reserves. ‐ The Swiss National Bank must hold at least twenty percent (20%) of its total assets in gold. Swiss Gold Initiative 04 Alan Leishman 2 13.11.2014 Nationalrat Luzi Stamm Reason dictates that transparency, a certain percentage of physical gold, and a gold‐ backed currency which does not devalue are the principles which should be followed by all the central banks around the world. In this, the Swiss National Bank should serve as an example to others. Swiss Gold Initiative 04 Alan Leishman 3 13.11.2014 SNB reveals location of Gold Of our 1,040 tonnes of gold, more than 70% and thereby the overwhelming proportion is stored in Switzerland. The remaining 30% is distributed between two countries. Roughly 20% of the gold reserves are kept at the central bank of the United Kingdom, and approximately 10% at the central bank of Canada.” http://snbchf.com/2013/04/swiss‐gold‐location‐gold‐initiative/ | SNB & CHF Swiss Gold Initiative 04 Alan Leishman 4 13.11.2014 Swiss Gold Location SNB Swiss Gold Location 17.01.2014 Location Tonnes % Switzerland 728 70 United Kingdom 208 20 Canada 104 10 Total 1040 100 Swiss Gold Initiative 04 Alan Leishman
    [Show full text]
  • A Comprehensive Guide to the Gold Price
    A Comprehensive Guide to the Gold Price A Comprehensive Guide to the Gold Price Table of Contents ______________________ Introduction ..................................................................................................................... 2 The Global Gold Market ............................................................................................... 3 The Over-the-Counter Spot Market ............................................................................ 4 The London Gold Fix ................................................................................................... 5 Futures Market Gold Prices.......................................................................................... 7 Where is the Gold Price Established? ....................................................................... 8 Gold Price Ratios ......................................................................................................... 10 Determinants of the Gold Price ................................................................................. 14 The Components of Demand and Supply ................................................................ 14 The Factors Behind Demand and Supply ................................................................. 15 The Gold Price and Inflation ..................................................................................... 16 The History of the US Dollar Gold Price ............................................................... 18 The 1934 Repricing to $35 Per Ounce .....................................................................
    [Show full text]
  • What Does (Not) Make Soft Power Work: Domestic Institutions and Chinese Public Diplomacy in Central Europe
    What Does (Not) Make Soft Power Work: Domestic Institutions and Chinese Public Diplomacy in Central Europe By Eszter Pálvölgyi-Polyák Submitted to Central European University Department of International Relations In partial fulfillment of the requirements for the degree of Master of Arts in International Relations Supervisor: Professor Erin Kristin Jenne Budapest, Hungary 2018 CEU eTD Collection Word count: 17,242 Abstract What does make soft power policies work in a certain context? In this thesis, I attempt to answer this question in the context of Chinese public diplomacy activities in the Central European region. In the past decade, China expressed increasing interest in this region, however, the same public diplomacy approach did not bring unitary response in different countries. The framework of the thesis relies on the conceptualizations of soft power, the literature on the determinants of success in soft power, and the domestic factors influencing a country’s foreign policy. The methodological approach used in the analysis is in-case process tracing. The two case countries, Hungary and the Czech Republic are selected on the basis of their similarities which act as control variables. While the soft power policies have multiple effects on the subject countries which are hard to predict, I provide an account which explains the success or failure of soft power through the domestic structure of the subject country. CEU eTD Collection i Acknowledgements I want to express my gratitude to every person who helped the development of this thesis in any way. My gratitude first and foremost goes to my supervisor, Professor Erin Jenne, who guided my research and helped to transform vague ideas into a tangible thesis.
    [Show full text]
  • Gold Price Dynamics Around the Clock
    Copenhagen Business School Department of Finance 15th May 2019 Gold Price Dynamics Around the Clock Authors: Francesco Donati (115765) Johannes A. Jung (115540) Supervisor: Paul Whelan Pages: 98 Characters: 183,273 Thesis submitted in partial fulfilment of the requirements for the degree of Master of Science in Advanced Economics and Finance (Cand.Oecon) Acknowledgements We want to thank Copenhagen Business School for the splendid learning opportunity. We express our deep gratitude to the thesis supervisor, Paul Whelan, for his guidance. We want to thank our friends and families for their precious support during this exciting last period of our student life. A special mention goes to our parents, of course. We want to thank the amazing people met in the program, their energy, drive and diversity inspired and improved us. We will be missing all the ups and downs of student's life. Further, we want to thank Beyza and Emanuela, for the laughs and joy they brought us every day. Lastly, Johannes wants to mention that his girl Ploy is more precious than gold to him. Francesco & Johannes Abstract In this thesis we examine intraday behaviour of gold prices in the 24 hours day. We make a distinction between eastern world (China, India) and western world (US, Europe). We suspect that the intraday pattern may be affected by two factors: (i) large gold imports by eastern countries and (ii) manipulation of the London Gold Fix. We find a hat-shaped intraday seasonality, with gold appreciating during eastern trading hours in a robust way and depreciating for the rest of the day.
    [Show full text]
  • The Effect of Lease Rates on Precious Metals Markets by Merlin Marr-Johnson, Metals Analyst, HSBC Bank USA
    THE LONDON BULLION MARKET ASSOCIATION The Effect of Lease Rates on Precious Metals Markets By Merlin Marr-Johnson, Metals Analyst, HSBC Bank USA In the precious metals First, it is probably worth Gold the interest rate differential returning to the simplest Again, the key to lease rates is in between dollar yields and lease markets, lease rates are fundamental of all. As changes in the supply and demand of lending. rates.The producers therefore buying (demand) and selling Staying with gold, the supply side unwittingly reinforced the frequently cited as root (supply) affect prices, so changes for gold lease rates rests firmly on arguments for a declining spot in borrowing (demand) and the large lending reserves market and a rising lease rate. causes for metal price lending (supply) affect lease rates. available to the market. Central The borrowing, of course, banks currently hold helped generate a strong demand behaviour. However, the A lease rate is simply the going approximately 29,000 tonnes of environment for borrowed market ‘price’ for borrowing or gold (multi-lateral institutions gold, which elevated lease rates reason for the lease rate lending the market. If a market is hold around another 4,200 to over 2%. oversupplied relative to demand, tonnes).With the perceived behaviour itself is rarely prices/lease rates are low, and if a economic stability of the 1990s, The reason for the shift lower in market is undersupplied relative and strong returns being achieved lease rates since 2000 stems from examined. This short to demand, prices/lease rates are by most asset classes, central bank an almost total reversal of every high.
    [Show full text]
  • The London Bullion Market Association Responsible Gold Guidance
    The London Bullion Market Association Responsible Gold Guidance About the London Bullion Market Association The LBMA is the international trade association that represents the market for gold and silver bullion, which is centred in London but has a global client base, including the majority of the central banks that hold gold, private sector investors, mining companies, producers, refiners and fabricators. The current membership includes 129 companies which are actively involved in the loco London bullion market, including trading houses, banks, refiners, miners and fabricators as well as those providing services to the market such as consultants, supervisors and assayers. The membership encompasses a total of 22 countries. The LBMA was formally incorporated in 1987 at the behest of the Bank of England to take over the roles previously played by two separate organisations, the London Gold Market and London Silver Market, whose origins go back to the mid-nineteenth century. The LBMA Good Delivery List In the refining industry, the LBMA Good Delivery List includes the world’s pre-eminent refiners of gold and silver, located in 31 countries. The List is widely recognized as the de facto standard for the quality of gold and silver market bars. This recognition is based on the stringent criteria that applicants must satisfy before being listed, as well as the regular proactive monitoring of accredited refiners by the LBMA. In addition to satisfying the LBMA’s technical standards, a refiner seeking LBMA accreditation must meet a number of non-technical criteria in relation to ownership, tangible net worth and operating history. In response to the Dodd-Frank legislation on conflict minerals emanating from the DRC, the LBMA has informed all gold refiners on the List that in order to maintain their Good Delivery status, they will have to demonstrate that their refined output is conflict-free.
    [Show full text]
  • Digital Silk Road in Central Asia: Present and Future
    Digital Silk Road in Central Asia: Present and Future NARGIS KASSENOVA & BRENDAN DUPREY, EDITORS JUNE 2021 Digital Silk Road in Central Asia: Present and Future Nargis Kassenova & Brendan Duprey, Editors JUNE 2021 Digital Silk Road in Central Asia: Present and Future is a project of the Davis Center for Russian and Eurasian Studies at Harvard University, and the Sustainable Kazakhstan Research Institute, Narxoz University, supported by a grant from Friedrich Ebert Foundation in Kazakhstan. © 2021 Davis Center for Russian and Eurasian Studies Cataloging-in-Publication data ISBN: 978-0-578-93435-8 Please direct inquiries to: Nargis Kassenova Kathryn W. and Shelby Cullom Davis Center for Russian and Eurasian Studies Harvard University 1730 Cambridge Street, Suite S301 Cambridge, MA 02138 Phone: 617.496.5684 Fax: 617.495.8319 [email protected] The full text of this report can be accessed at https://daviscenter.fas.harvard.edu/digital-silk-road. Limited print copies are also available. ii Digital Silk Road in Central Asia: Present and Future Contents iv Acknowledgements v Introduction Nargis Kassenova and Brendan Duprey vii Executive Summary 1 The Puzzle of the Digital Silk Road Elisa Oreglia, Hongyi Ren, and Chia-Chi Liao 9 Sino-Russian Advocacy for “Internet Sovereignty” and State-Led Internet Governance Miranda Lupion 17 Digital Silk Road and Surveillance Technology in Central Asia Cian Stryker 55 The Sino-Russian Digital Cooperation and Its Implications for Central Asia Miranda Lupion 77 Beyond the GovTech: The Pitfalls of Kazakhstan’s Digitalization Agenda Anna Gussarova 85 Turkmenistan’s Digitalization Strategy: Old Practices, New Façade? Rustam Muhamedov 93 The Role of Big Earth Data for the Implementation of the Sustainable Development Goals in Central Asia Brendan Duprey and Akmal Akramkhanov 118 About the Authors Contents iii Acknowledgements We would like to thank the Friedrich Ebert Foundation in Kazakhstan for providing moral and financial support to the project.
    [Show full text]
  • The Last Central Bank Gold Agreement
    ALCHEMIST ISSUE 96 THE LAST CENTRAL BANK GOLD AGREEMENT This is an extract from the European Since 1999 the OVER TIME INNOVATIONS gold market has IN FINANCIAL ENGINEERING Central Bank (ECB) Economic Bulletin, grown and matured FACILITATED THE USE OF GOLD Issue 7 2019, reproduced with the in terms of liquidity AS A FINANCIAL INSTRUMENT 2 kind permission of the ECB. and investor base . THANKS TO THE DEVELOPMENT The structure of the OF EXCHANGE-TRADED gold market differs The last Central Bank Gold Agreement (CBGA) expired in September from that of other PRODUCTS TRACKING GOLD 2019 after 20 years of such agreements. The CBGAs’ signatories financial assets, as PRICES AND BACKED BY included the Eurosystem and the central banks of Sweden, Switzerland gold does not only PHYSICAL GOLD and – initially – the United Kingdom. The first CBGA1 was set up in 1999 serve investment for a five-year period, when concerns about the negative market impact of purposes, but also has practical uses. At the time of the first CBGA, uncoordinated gold sales by central banks were evident, and increasing, the diversity of demand for physical gold was low and concentrated in the gold market. The goal of the CBGAs was to help stabilise the gold in jewellery, while the contribution to demand from the official sector market by alleviating these concerns, relieving downward pressure on was negative. gold prices, and contributing towards more balanced supply and demand conditions by limiting and coordinating central banks’ gold sales. The CHART A Agreement was renewed three times, each time for a five-year period.
    [Show full text]
  • Chapter 3, Section 1 – China and Continental Southeast Asia.Pdf
    CHAPTER 3 CHINA AND THE WORLD SECTION 1: CHINA AND CONTINENTAL SOUTHEAST ASIA Key Findings • China’s pursuit of strategic and economic interests in Burma (Myanmar), Thailand, Cambodia, and Laos often jeopardizes regional environmental conditions, threatens government ac- countability, and undermines commercial opportunities for U.S. firms. • China has promoted a model of development in continental Southeast Asia that focuses on economic growth, to the exclu- sion of political liberalization and social capacity building. This model runs counter to U.S. geopolitical and business interests as Chinese business practices place U.S. firms at a disadvantage in some of Southeast Asia’s fastest-growing economies, particu- larly through behavior that facilitates corruption. • China pursues several complementary goals in continental Southeast Asia, including bypassing the Strait of Malacca via an overland route in Burma, constructing north-south infra- structure networks linking Kunming to Singapore through Laos, Thailand, Burma, and Vietnam, and increasing export opportunities in the region. The Chinese government also de- sires to increase control and leverage over Burma along its 1,370-mile-long border, which is both porous and the setting for conflict between ethnic armed groups (EAGs) and the Burmese military. Chinese firms have invested in exploiting natural re- sources, particularly jade in Burma, agricultural land in Laos, and hydropower resources in Burma and along the Mekong Riv- er. China also seeks closer relations with Thailand, a U.S. treaty ally, particularly through military cooperation. • As much as 82 percent of Chinese imported oil is shipped through the Strait of Malacca making it vulnerable to disrup- tion.
    [Show full text]
  • China's Great Power Play Puts Asia on Edge
    9/16/2020 China’s great power play puts Asia on edge | Financial Times Chinese politics & policy China’s great power play puts Asia on edge Domestic insecurity, ambition and the pandemic blamed for Beijing’s belligerence China’s defence budget has increased by double digits every year for the past two decades © Kyodo News/Getty James Kynge in Hong Kong, Kathrin Hille in Taipei, Christian Shepherd in Beijing and Amy Kazmin in New Delhi 3 HOURS AGO China’s southern and eastern reaches are ringed with anxiety, raising fears of conflict sparked by miscalculation or even by design. The potential flashpoints are familiar: Taiwan; disputed islands in the South China and East China Seas; and India’s Himalayan border. What is unusual is that tensions have risen in unison and some commentators have warned that there are risks of military flare-ups potentially involving the US. “Since China and the United States are nuclear powers, the risk of a direct war between the two countries is still very small, but small-scale military conflicts do happen,” said Yan Xuetong at Tsinghua University, one of China’s most influential academics. “There is a qualitative difference in scale between a direct war and military conflicts,” Mr Yan said via email. “The core conflict between China and the United States is power competition and the smaller the power gap between the two, the more intense the competition will be.” https://www.ft.com/content/de4df609-2599-47cb-ba37-0b754d4f3b57 1/7 9/16/2020 China’s great power play puts Asia on edge | Financial Times But why is Beijing’s assertiveness intensifying on its periphery even as its relationship with the US shifts from strategic competition towards outright hostility? Analysts ascribe the tougher edge to a confluence of domestic insecurity after crackdowns in regions such as Hong Kong and Xinjiang, great power ambitions fuelled by the leadership of Xi Jinping, and a touch of opportunism afforded by the coronavirus pandemic.
    [Show full text]
  • Lending and Borrowing Metal Lending Allocated Metal Options
    Editor’s Note SECTION 9 Introduction London Bullion Market Association Lending and Borrowing London Platinum and Palladium Market Metal The Price London Good Delivery – Gold and Silver Deposits and Leases Good Delivery – Platinum and Palladium London Precious Metals Clearing Limited Calculation Basis Precious Metal Accounts Interest Paid in Currency or Metal Lending and Borrowing Metal Lending Allocated Metal Options Precious Metal Benchmarks Forwards Bank of England Outright Forwards Futures Markets and Exchange Traded Products Forward Forwards Physical Metal Documentation Short Dated Forwards Market Regulation Transaction Dates Taxation ‘End End’ Convention Conversion Table Key Facts about Precious Metals Market Size Clearing Statistics Contango or Backwardation Market Trade Statistics Central Bank and Governmental What Determines Metal Interest Rates Ownership of Gold Properties of Precious Metals Receiving Interest on a Deposit Frequently Asked Questions Options Annexes Disclaimer BACK TO CONTENTS 39 THE GUIDE 2017 - Version 1.0 Editor’s Note Lending and Borrowing Metal Introduction London Bullion Market Association It is often blithely asserted that precious metals have no interest rate. At maturity, the loan can be rolled over (depending on credit This is incorrect. considerations), either with the existing lender or with another bank. London Platinum and Palladium Market The lender has full credit exposure to the borrower over the amount of The Price Deposits and Leases the loan – the currency value of which will fluctuate as the underlying The rationale for lending and, particularly, borrowing metal will vary metal price increases or decreases. London Good Delivery – Gold and Silver between gold, silver, platinum and palladium. However, very broadly speaking, lenders of metals will be seeking a return on their investment, However, it is unlikely that the fibreglass manufacturer will have ready Good Delivery – Platinum and Palladium whereas the borrowers will have a variety of motives.
    [Show full text]
  • Downloaded From
    IMPORTANT: The Stock Exchange of Hong Kong Limited (the “SEHK”), the Securities and Futures Commission (“SFC”) and the Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Announcement. Sensible Asset Management Hong Kong Limited (the “Manager”) accepts full responsibility for the accuracy of the information contained in this Announcement as at the date of publication, and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief, as at the date of publication, there are no other facts the omission of which would make any statement misleading. SFC authorisation is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. Investment involves risks, including the loss of principal. You are advised to consider your investment objectives and circumstances in determining the suitability of an investment in the Value Gold ETF. An investment in the Value Gold ETF may not be suitable for everyone. If you are in doubt about the contents of this Announcement, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser. Value Gold ETF (A Hong Kong unit trust, authorised under Section 104 of the Securities and Futures Ordinance (Cap.
    [Show full text]