You may have heard of the new Pan Asia Gold Exchange (PAGE), a new Chinese based eastern rival to the western bullion banks of the COMEX and London Bullion Market Association (LBMA). The very interesting interview below by James Turk of Ned Naylor-Leyland conducted during the recent GATA conference in London details the significance of the soon to be available 90 day rolling spot contract on the PAGE. This is as opposed to the existing 10 ounce mini contract which was chiefly aimed at simplifying investing for Chinese retail gold investors.
A friend of ours who attended the GATA conference, suggested the presentation given by Ned Naylor-Leyland was perhaps the most interesting of the conference – big praise given the calibre of speakers included many big names in the precious metals market.
Anyway, the real significance of this new 90 day rolling spot contract is that it will be available to gold investors worldwide through major brokerages and that it is fully backed allocated metal unlike the 100 to 1 leverage of the existing monopoly of the LBMA/COMEX variety.
This is very likely to attract large numbers away from the existing monopoly due to the much better quality of the Pan Asia Gold Exchange for the simply reason that it is closer to physical metal – being fully backed 1 to 1.
Ned discusses the unusual circumstance of how the existing gold futures market actually takes the lead in setting the price of gold over the spot market. That is that currently the price of gold and silver are set by the paper sale of gold and silver on the futures market as opposed to the other way round. Oil is the only other market where this occurs.
So the new rolling spot contract on the PAGE exchange will have a significant impact in terms of price discovery in gold. Probably a more “accurate” price than we get currently. This is very major news that is flying under the radar and not widely reported.