New Gold Exchange

The Chinese Pan Asian Gold Exchange changes the dynamics of gold exchange in the Pacific Rim, without any swapped contracts to stand between you and taking delivery.

Sprott may be interested in this exchange, but alternatively Sprott is well situated to purchase gold straight out of the mines, rather than lend their money indefinitely to the bullion banks and taking delivery of cash by default. If the bullion banks go broke, which is a very real possiblity, they lose every last penny in the effor to take delivery of gold.

In some ways, Sprott would have a strong interest in making purchases out of the mines and taking delivery for its physical precious metals funds. What they would have to do is to close a deal to finance a mine development and hold senior notes against payments in gold. Their physical precious metals fund would hold these notes in lieu of delivery.

Sprott may have had difficulties in the past obtaining gold out of the precious metals exchanges, so this is a good way to fulfill their obligations to their physical precious metals fund unit holders at the same time as guaranteeing delivery of their physical demand.

To my mind, any exchange that cannot make good delivery of their precious metals just doesn't exist as a real metals exchange, nor can they make a fix on the gold price. The Dodd Frank act was implemented against the trading of CFD's online as people were defrauded out of their taking delivery of their precious metals as the CFD exchanges could not make delivery only trade on price.

Dodd Frank made a serious impact on the futures exchanges, but no impact on gold futures more than a year out.

http://maxkeiser.com/2011/07/31/on-the-edge-with-ned-naylor-leyland/

http://finance.yahoo.com/q/fc?s=GCM11.CMX