Hong Kong gold hub shifts market toward physical
The guest argued that Hong Kong's new gold clearing system (HKPMCC) will attract massive mainland Chinese liquidity and drive the global gold market toward physical settlement over paper contracts.
The argument
Unlike previous failed attempts under mainland capital controls, this offshore Hong Kong hub is backed by major international banks and is expected to introduce 'gold southbound channels' for mainland citizens. The guest projects the hub will achieve 50% to 70% physical backing, contrasting sharply with the highly leveraged paper-to-physical ratio of the LBMA.
The thesis, stress-tested
✓ What validates it
- ✓Official launch of a 'gold southbound channel' allowing mainland Chinese citizens to buy gold in Hong Kong
- ✓Published clearing data from the HKPMCC showing high physical delivery ratios after several months of trading
▸ Risks discussed
- ▸The new hub could fail to attract foreign capital if capital controls are perceived as too restrictive
- ▸Physical withdrawal rates could end up mimicking Western paper exchanges instead of the SGE
Hear it yourself
"Now in terms of whether or not, like, Silver would get to 300, 500, like the the experts are saying, I don't know. I don't think anybody knows. I mean, like, they have their, models, and they have their reasons. But from my perspective, I think, you know, we can discuss that once we get back above 100 and, you know, stay up there and retest 01/20. Gold has historically been one of the most reliable stores of wealth, but now there's a way to earn from it directly. Monetary Metals operates the gold yield marketplace, where holders of physical gold and silver can earn yield on their metal paid in ounces of gold, not dollars."
09:15
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