Markets
Derivatives and Structured Products

Certified Gold Exchange Warns Investors

Image

America’s Trusted Source for Gold says the April 2013 gold price crash is a prime example of computerised derivatives trading negatively affecting the physical gold investment market.

Following the release of an International Business Times report detailing how the dramatic crash of the gold price in April of last year, the Certified Gold Exchange is warning investors about the correlation between computerised trading of gold derivatives investments and the value of physical gold.

The IBT article stated that over 1,000 unique entities sold gold within a 10-minute window last April and that the gold spot price dropped US$24 per ounce due to the exchange of 2.4m ounces of gold.

“A US$50 shift in the gold spot price in one day is huge, and last April we saw gold fall more than US$200 in less than two trading days,” said Certified Gold Exchange spokesperson Janet Jones. “Many investors who buy physical gold do so for the safety aspect, but this does not mean that they will accept technological manipulation of the gold spot price.”

Futures markets are not controlled in the same manner as are stocks, and Jones says the Dodd-Frank Act, meant to regulate leveraged and non-physical gold investments, is a good start but not enough to protect the physical gold market. “We understand that ETFs and other derivative investments played a large part in last year’s crash, but for millions of ounces of gold to exchange hands in less than 10 minutes is unacceptable for investors who purchased physical gold to avoid the manipulation that is often found in derivatives exchanges.”

In this section

CGE Warns About Dangers of Derivatives

The Certified Gold Exchange is warning investors about the correlation between computerised trading of gold derivatives investments and the value of physical gold.

READ MORE →

Barclays W&IM; Triples Asian Structured Products Business

The wealth and investment management division of Barclays has seen tremendous traction in its Asian structured products business, with volumes tripling from 2010. Asia now accounts for 50% of structured products sales in the private bank globally.

READ MORE →

Sasol Completes $4 Billion Credit Facility for its Global Ethane Cracker and Derivatives Complex

International energy and chemical company announced the completion of a US$4 billion credit facility for its ethane cracker and derivatives at its existing site in Lake Charles, Louisiana.

READ MORE →

Manufacturing Growth Going Steady

Activity in the manufacturing sector remained broadly steady in March, according to the CBI's latest Industrial Trends Survey.

READ MORE →

UK Businesses Not Sufficiently Prepared for Future Workforce Challenges

UK businesses are not planning how to manage and deploy human capital, according to a poll conducted by Corporate Research Forum, in conjunction with KPMG. Strategic Workforce Planning (SWP) includes taking actions to acquire, retain, develop, motivate and deploy human capital. Increasingly since the financial crisis, SWP has been utilised by businesses looking to improve performance and manage future challenges. However, this research indicates that there is substantial room for improvement.

READ MORE →