Interview: Bail-ins May Cause Bank Runs and Capital Controls In Western World – Russia, China Opt Out

Wednesday, May 14, 2014
By Paul Martin

Gold Core
Wednesday, 14 May 2014

An informational letter released this morning by the company and signed by Simon Weeks of Scotia Bank, current chairman of the silver fixing, attempts to address a number of concerns that users of the silver fixing data may now have.

In answer to the question of what happens after 14th August for those market participants who have contracts and terms and conditions referencing the Silver Fix, the Chairman states that “The Company is not in a position to comment on such matters, but market participants can speak to their contractual counterparties.”

The reason for the ending of the fix is due to increased regulatory scrutiny of the gold and silver market due to allegations of price rigging and manipulation. Many analysts believe that market manipulation has contributed to sharp sell offs and price weakness in recent months.

Platinum and palladium added to sharp gains made overnight on worries that increasing labour tensions in major producer South Africa and tensions with Russia could hurt supply. Gold edged up and broke above $1,300/oz on escalating violence in Ukraine and heightened geopolitical tensions.

Ukrainian troops were attacked and seven were killed by pro-Russian separatists yesterday, in the heaviest loss of life for government forces in a single clash since Kiev sent soldiers to put down the revolution in the country’s east.

East-West relations are being poisoned by the day and this should support gold prices.

Russia retaliated against U.S. sanctions by hitting strategic aerospace projects, including refusing to extend the life of the International Space Station, a showcase of post-Cold War cooperation.

After four deaths over the weekend, South Africa upped security in the platinum belt to protect miners who have decided to ditch a 16-week strike that has halted 40% of normal global output.

Hundreds of stick-wielding miners barricaded roads and torched roadside vegetable stalls near Lonmin’s South African platinum mine on Tuesday, in an attempt to block fellow strikers from breaking rank and going back to work.

Platinum edged up 0.4% to $1,452.00 an ounce after jumping about 1% in the previous session to its highest in a month. Palladium also rose 0.4% after rising 1.1% overnight to a one-week high.

Platinum stockpiles having been reduced and this should lead to higher platinum prices.

South Africa is the top producer of platinum and second biggest producer of palladium after Russia.


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