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The transportation costs should be covered by the premiumsThat could be indicative of other things like import restrictions, international transportation issues (costs, insurance, etc.), liquidity, etc.
...or... maybe difficulty in sourcing physical in the west to send east....
I remember back in September or so China was restricting imports and it caused a similar premium disparity. China, like India, tries to control gold imports. I think it has something to do with local money flow to foreign shores (affecting FX markets) or something....
The problem is, a) I can't find any info about such restrictions, and b) they would make no sense.
...
Possible, but I still don't understand,I remember back in September or so China was restricting imports and it caused a similar premium disparity. China, like India, tries to control gold imports. I think it has something to do with local money flow to foreign shores (affecting FX markets) or something.
So, in order to blow up West's PM pricing mechanism all they need to do is to lift their import limitations.If left unlimited, gold imports would be so huge it would affect a large trade imbalance. India is also.closing loopholes on gold jewelry imports. I believe there is a 10% import tax on top of large premiums for gold.
Mark my words when the LBMA and COMEX are emptied premiums will skyrocket. ...
Talked to some people in China and this is what’s happening:
1) The Shanghai Gold futures at the Shanghai Futures Exchange (SHFE) is a paper market
2) Shanghai Gold Exchange (SGE) is physical Gold only market.
3) The Chinese are imposing transaction limits on the SHFE because they don’t want the paper Gold market dictating a speculative paper Gold price to the SGE physical Gold only market during a FOMO buying frenzy (of course the two prices are correlated).
4) This might push even more liquidity into the SGE physical Gold only market in the long run.
5) Meanwhile, Gold contracts volume should decrease at the SHFE.
Higher than a college kid on spring break in Jamaica.12.4% Chinese premium. How high can it go?
The Shanghai Gold futures at the Shanghai Futures Exchange (SHFE) is a paper market
Why do US banks sell so many naked shorts in the market often at incredible losses?
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