By The Sirius Report
In yet another clear signal that we are going to see the adoption of Gold and the return of “sound money” in the new economic, political and social global paradigm shift ,we note that the Chinese Gold & Silver Exchange Society (CGSE), Hong Kong’s gold exchange, is currently in talks with Singapore, Myanmar and Dubai to establish a gold commodity corridor to promote yuan-denominated products under the umbrella of China’s One Belt One Road Initiative (OBOR).
The plan is to develop this corridor via the establishment of an infrastructure network utilising Hong Kong as a base, and connect the proposed bonded warehouse in Qianhai with commercial users and precious metals traders in countries across the entire OBOR.
The expectation is that this will not only significantly increase the demand for kilogram bars but it will also increase the demand for yuan-denominated products multifold. Turnover in the last Chinese Year at the Hong Kong gold market averaged between HK$150 billion (US$19.2 billion) and HK$180 billion per day, while averaging about 30 billion yuan (US$4.7 billion) to 40 billion yuan for yuan-denominated products.
The proposed bonded warehouse in Qianhai free-trade zone, which is near to Shenzhen, is capable of storing 1,500 tonnes of gold, is expected to provide custodial and physical settlement services. Such is the pace of this initiative that this warehouse is expected to commence operations within the next three months having already been given tacit approval by Customs officials.
What this initiative signifies is that China in conjunction with Hong Kong is seeking to develop a OBOR gold market and could easily expand the bonded warehouse mechanism, across the entire OBOR initiative, as seen in Qianhai. In the process it will also enhance Hong Kong’s status as a major international gold hub. The case for the adoption of Gold could not be any clearer and with it we will see the end of FIAT currencies.
This article (China and Hong Kong Make The Case For Gold Alongside the OBOR) was originally published on The Sirius Report and syndicated by The Event Chronicle.