Thursday, July 26, 2012

Hong Kong to Open 1,000 Metric Ton Gold Vault

In the previous post I described how western gold vaults were being emptied by the LBMA and its members who are alleged to have raided both allocated and unallocated client gold holdings in order for the LBMA to fix the price of gold (down). I've referenced the "London trader" here and here. In addition I have documented several stories of China acquiring gold here.

Of course, one might be dismissive of an anonymous "London trader". After all, where are the facts? Well today we can add some tangible evidence that China is adding to its gold storage capacity:

Hong Kong’s largest gold-storage facility, which can hold about 22 percent of the bullion now in Fort Knox, will open in September to meet rising demand from banks and the wealthy, according to owner Malca-Amit Global Ltd. (3271)
The facility, located on the ground floor of a building within the international airport compound, has capacity for 1,000 metric tons, said Joshua Rotbart, general manager for the Hong Kong-based company’s Malca-Amit Precious Metals unit. Two of the vaults may hold assets, including gold, for banks and financial institutions, and others will be used for diamonds, jewelry, fine art and precious metals, said Rotbart.
The move in Hong Kong reflects increased demand for gold in Asia even as the commodity struggles to sustain its rally into a 12th year. Gold-demand growth in China, the world’s second- largest user after India last year, is slowing, according to the World Gold Council. Vault charges will depend on each customer’s operations, according to Rotbart, who declined to give a figure for the venture’s cost beyond millions of dollars.
“Hong Kong is a very important center for gold, especially because it acts as a doorway to China,” said Sunil Kashyap, head of Asia-Pacific foreign exchange and precious metals at Scotiabank. “Current international hubs are in New York, Zurich and London. There’s still a need to set up an Asian hub for physical gold. The trend is for more people to look at storage and trading in Asia, when it comes to physical metal.”

So here is tangible evidence that support the London trader's assertion. And from the same story:

“The general trend is for moving the assets from the West to the East,” said Rotbart, who also oversees business development and marketing of the company’s vault in the Singapore FreePort. “Proximity to China is very important.”
 So as western vaults are being emptied, China and other Asian countries are filling them up and building new vaults.

What do you think they know that western investors don't seem to know? Perhaps its that western economies and financial institutions are so rotten to the core, they can no longer be trusted.

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