London may be 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 the Dubai Gold Securities (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.
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…) may collapse, and physical gold will soar. Read the article about this development, CLICK HERE
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