Dubai Is Moving It’s Gold out of London

Trader Tracks (05/22/2009)
"London is soon going to see a huge outflow of gold.
  1. DMCC's new vault became operational on April 26 this year.
  2. ETF gold from DGS will be moved to these new vaults.
  3. Gold reserves of regional central banks' also likely to shift from London.
  4. This move by Dubai is evidence of a loss of confidence in London’s gold market.
Conclusion: London is FINALLY losing its role as the world’s hub for physical gold storing and trading. It is going to be very interesting to see what happens when DGS tries to move its gold from HSBC in London to Dubai. HSBC is the custodian of both DGS and GLD, which raises a major question mark about whether the gold is really there. (Editor: Should the gold not be in the vaults the gold owners come after HSBC very hard). "The growing demand for physical gold together with the tons of gold flowing out of London to Dubai will result in a major default somewhere on an obligation to deliver gold. After that, paper gold (futures, GLD, etc…) will collapse, and physical gold will soar."

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