Hong Kong Gold Market
The next large market to trade is Hong Kong, its pricing is reflected in the ACCESS quotes. The Hong Kong market is venerable in itself, having first traded gold in 1910, when British banks thought that they might need a mechanism for trading gold in the Orient. Presently it is the launch site for gold headed to mainland China, one of the fastest-growing gold markets in the world. As a matter of fact, the entire Asian market has been so active in recent years that American and European gold traders who travel there talk about it in wistful tones normally reserved for the American market of the late 1970s and early 1980s. This market is highly influential in Asia, due to the fact that Hong Kong is where Japanes investors, banks, and financial houses occasionally hedge their orders and make their physical purchases. It is also in a time zone that fits perfectly with the business day of traders in Saudi Arabia and the rest of the Persian Gulf, especially the new and quickly growing market in Dubai.
If Hong Kong gold is moving, it is usually because they are buying or selling of the Middle East investors. Large quantities of Hong Kong gold are also manufactured into jewelry for export throughout Asia. For the most part, Hong Kong serves as a convenient midpoint in a trading day because it fills the gap between markets in the United States and Europe.
In his site, World of Gold, gold historian and analyst, Timothy Green characterizes the Hong Kong market the following way:
- They (the Hong Kong traders) like awkward tael-weight bars (based on 1.2-ounce units) and resist suggestions that they should trade in ounces and U.S. dollars to conform to world patterns. They delayed for years the introduction of the Reuters monitor computer system, fearing a computer must invade the secrecy of their ‘society’.
These sentiments do not sound foreign at all for many American and European gold owners.
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