Shanghai Gold Exchange (SGE and SFE) gold and silver

[Peter89]

Silver bars of raw material of the largest state-owned silver seller Zhaokuang on http://JD.com is now at a price of ￥6.98/gram today, equivalent to $30.15/ounce

©Bai Xiaojun


$30/oz
raw silver should be of lower purity than lmba approved bars, i.e. lower price, i.e. under spot
$20?
that would be a 50% premium!

 

[Peter89]

All time high
The hottest selling gold bars on http://JD.com which is the largest e-commmerce hit all time high at a price of ￥511/gram today, equivalent to $2207.48/ounce.
10 gram gold bar

©Bai Xiaojun

 

[Peter89]

That 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....

The transportation costs should be covered by the premiums
The only viable explanation for me are import restrictions.
The problem is, a) I can't find any info about such restrictions, and b) they would make no sense.

Difficulty in sourcing the metal at spot prices, yes, possible too

 

[pmbug]

...
The problem is, a) I can't find any info about such restrictions, and b) they would make no sense.
...

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.

 

[Peter89]

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.

Possible, but I still don't understand,
limiting imports they are making Chinese PM manufacturers and end users very unhappy,
their plan was/is to increase national PM reserves - both public and private,
if they want to internationalise their Yuan, they should be happy about money outflows

 

[nickndfl]

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.

 

[Peter89]

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.

So, in order to blow up West's PM pricing mechanism all they need to do is to lift their import limitations.

 

[searcher]

Chinese Buying Set the Stage for Gold’s Latest Record Run

(Bloomberg) -- This week’s gold rush may have been triggered by bets on the US Federal Reserve’s long-anticipated pivot to looser monetary policy, but the foundations for the record rally were laid in China.Most Read from BloombergThese Are the Best Countries for Wealthy ExpatsBillions Pour Into...

finance.yahoo.com

 

[Peter89]

!

 

[nickndfl]

Mark my words when the LBMA and COMEX are emptied premiums will skyrocket. No physical supplier will sell at lower western spot prices when they can get more from Lee Bang Chow.

 

[pmbug]

Mark my words when the LBMA and COMEX are emptied premiums will skyrocket. ...

 

[Peter89]

$3+ premium!

 

[pmbug]

12.4% Chinese premium. How high can it go?

 

[SilverSamurai]

Turmoil in China
Fiat failings everywhere
Sparks metal mania

 

[pmbug]

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.

 

[nickndfl]

12.4% Chinese premium. How high can it go?

Higher than a college kid on spring break in Jamaica.

 

[Peter89]

The Shanghai Gold futures at the Shanghai Futures Exchange (SHFE) is a paper market

As long as they require shorts to show proof of having the metal - i.e. as long as they prevent naked shorting -, it's not
imo