New Futures Exchange In India

On December 29, 2008 the National Commodity & Derivatives Exchange Limited (NCDEX) will begin trading gold and silver futures contracts in India.  The contracts will be denominated in rupees, sized in lots of one kilogram or 30 kilogram and physically settled in Ahmedabad.  I have often written about the gold price suppression scheme.  A key component are the GLD and SLV ETFs (GLD) (SLV) and the COMEX.

Another futures exchange in India and not under CFTC jurisdiction is a positive development because it will increase liquidity in the gold market and allow for more physical bullion to change hands.  As the gold flows into private hands this may hinder the ability of the gold cartel to continue with their price suppression.  This strikes at a time when New York is viewed as a cesspool of corruption where the hot tub is filled with the likes of Bernie Madoff.

India is already a large gold importer at about 600-800 tons or approximately 25% of worldwide production.  India also imports about 3,000-4,000 tons of silver per year with demand mainly among the poor rural farmers.  The Indians are well known for wanting to ‘make off’ with their physical gold where they can hide it away from prying eyes.  It is estimated that at least 10% of above ground stockpiles are held by Indian women.  This increased competition to the COMEX and delivery of physical bullion will force additional discipline and integrity onto the COMEX.

Disclosures:  Long physical gold; no position in GLD or SLV.

Trace Mayer

RuntoGold.com

Trace Mayer, J.D., holds a degree in Accounting from Brigham Young University, a law degree from California Western School of Law and studies the Austrian school of economics. He works as an entrepreneur, investor, journalist and monetary scientist. He is a strong advocate of the freedom of speech, a member of the Society of Professional Journalists and the San Diego County Bar Association. He has appeared on ABC, NBC, BNN, many radio shows and presented at many investment conferences throughout the world.