Currently the price of gold is fixed in London each day, and has been for many decades. This privilege has been abused relentlessly but only recently did Barclays bank fess up to price manipulation and pay $44 million for price rigging. The following chart shows the extent of the daily rigging and artificial downward pressure on gold prices at the time of the morning and afternoon London gold fix:
Because of this corruption of free trade and the migration of the gold market from west to east, competitor exchanges are now moving in on the act and they include the Dubai Gold Exchange, the London Metals Exchange and now the Singapore Gold Exchange.
Just three weeks ago, the Singapore unveiled plans to launch a physically deliverable gold contract starting in September to meet strong demand from Asia, home to the world’s biggest gold buyers. This is a significant move as Singapore will outstrip Switzerland as the number one home of offshore wealth by 2020. People trust Singapore with their money. Singapore plans to create a physical delivery market for 25 kg gold bars, which will instantly create a market for ultra-high-end gold consumers such as governments, institutions and the uber rich.
It gets interesting when considering the timing of the price fix for this market, as it lies completely outside the time for the twice daily London fix. This market will seriously take off and when it does there will be an independent price locator outside London smack in the middle to the time zone when most of the worlds physical gold is traded. The scope for the western central banks to manipulate prices is shrinking rapidly
Watch this space