Tuesday, June 26, 2007

Gold Market Update

Gold trading is directionless, sentiment is negative as I observe at mainstream media publications.

Gold markets structural developments:

Small-Lot Gold Futures

100 gram gold contracts to be issued in China and Japan :

"BEIJING, June 26 -- The Shanghai Gold Exchange will launch individual gold bullion trading nationwide in July by teaming up with Industrial Bank."


"TOCOM hopes to inaugurate the new section, aimed at attracting individual investors with reduced trading risks, on July 9. The basic trading unit will be lowered to 100 grams from one kilogram for the existing gold futures. The per-lot margin will be fixed at 12,000 yen for July compared with 90,000 yen for the existing market. Transactions will be settled with cash, not with physical delivery. The daily price fluctuation range will be initially set at 120 yen, twice as wide as for the existing gold futures."

India Gold ETF's

"Sandesh Kirkire, CEO of Kotak Mahindra AMC:

Q: Can you put into perspective as to how much you would actually be investing in physical gold and how much would be in money markets?
A: I think a significant portion will be in physical gold and very marginal amount will remain in cash and cash equivalents. "


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