Globex - why gold was hacked

[metric]

The market delivered a huge"drubbing" to gold and silver Friday– or at least that's what thefinancial powers want you to think.

To try and find out what happened, I looked at the Kitco 24-hour chart and saw that, for the very first time, the "New York Globex" system was listed at the bottom.


Until yesterday, one only used to see the trading days for London, New York, Sydney, and Hong Kong.


I have never heard of a “Globex” before, so I looked it up. Here is an article from January this year .
Globex is a super-fast, 24 hour, around-the-clock and around-the-globe trading platform that was instituted by the Chicago Mercantile exchange. Since I had never heard of it anywhere before, I did a Google News search on it for today.

Nothing.

No news reports that Globex just went into effect for gold trading, or that it was planned to be put into effect. Hmm. A $35 price drop in gold coupled with the secretive launch of a brand new, super fast, 33 trades per second global trading platform for gold. What a coincidence!

I remember when JP Morgan closed its trading desk in New York and opened in London so it could exercise its "gold control" on both sides of the Atlantic. The “Globex” appears to be an extension of the same strategy.

What people often forget on days like this is that the COMEX is nothing but a paper-trading market. Contracts almost never go into delivery. Over 90% of the transactions are getting settled in cash, so the "prices" we all see flicker across our screens are about a accurate a reflection of true demand for physical gold and silver as TV sitcoms are of the lives of real people.

http://www.marketoracle.co.uk/Article4396.html

 

[Nick Radge]

Globex has been around for many years, at least 10 off the top of my head, but probably longer. Most major futures contracts trade on it. There is nothing secretive about it. The only anomaly that could occur would be a low liquidity 'spike', although these are usually associated with night trading in the lower liquidity contracts, like Rough Rice or Oats or Bean Meal. Gold was sold off during Globex because it was the first port of call for traders at that time of the night. If it had been an anomaly it would have bounced straight back in the regular trading hours, but it didn't.

The fact that 10% of traded volume goes to delivery has also never been a secret. The fact is that futures are designed for commercial users but they require liquidity from speculators. Speculators are small drops in a big ocean of commercial ocean which is why such a small percentage only ever take delivery.

Nothing secret. Nothing new.




This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

 

[Timmy]

Yes Nick, Globex has been around since 1992.

Gold trading on Globex launched in December 2006. There is a publicity brochure here, and more detailed info here.